American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry
American Economic Journal: Microeconomics
(pp. 260–327)
Abstract
Common ownership—where several firms are (partially) owned by the same investors—and its impact on product market competition has recently drawn much attention. This paper focuses on its implications for market entry. We consider the entry decisions of generic pharmaceutical firms into drug markets that are opened up by the end of regulatory protection and which were previously dominated by a single firm selling the brand name drug. We find robust evidence that an increase in common ownership leads to a significant reduction in generic entry.Citation
Newham, Melissa, Jo Seldeslachts, and Albert Banal-Estañol. 2025. "Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry." American Economic Journal: Microeconomics 17 (4): 260–327. DOI: 10.1257/mic.20220220Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L13 Oligopoly and Other Imperfect Markets
- L51 Economics of Regulation
- L65 Chemicals; Plastics; Rubber; Drugs; Biotechnology
- M31 Marketing