Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Forthcoming
  • Article
  • Management Science

Trials and Terminations: Learning from Competitors' R&D Failures

By: Joshua L. Krieger
  • Format:Print
ShareBar

Abstract

I analyze project continuation decisions where firms may resolve uncertainty through news about competitors' research and development (R&D) failures, as well as through their own results. I examine the trade-offs and interactions between product-market competition and technological learning from parallel R&D projects. Leveraging the biopharmaceutical industry's unique characteristics to overcome barriers to measuring project-level responses, I employ a difference-in-differences strategy to evaluate how competitor exit news alters a firm's own project discontinuation decisions. The findings reveal that technological learning dominates competition effects. Firms are most sensitive to competitor failure news from within the same market and same technology area—more than doubling their propensity to terminate drug development projects in the wake of this type of information. Finally, I explore how levels of competition, uncertainty, and opportunities to learn moderate the response to competitor failure news.

Keywords

Research And Development; Projects; Failure; Decision Making; Learning

Citation

Krieger, Joshua L. "Trials and Terminations: Learning from Competitors' R&D Failures." Management Science (forthcoming).
  • Read Now

About The Author

Joshua Lev Krieger

Entrepreneurial Management
→More Publications

More from the Author

    • December 2020
    • Faculty Research

    Forecasting ClimaCell

    By: Joshua Lev Krieger, Christopher Stanton and James Barnett
    • September 2020 (Revised January 2021)
    • Faculty Research

    Catalys Pacific

    By: Joshua Lev Krieger
    • December 2019
    • Faculty Research

    Forecasting ClimaCell

    By: Joshua Lev Krieger, Christopher Stanton and James Barnett
More from the Author
  • Forecasting ClimaCell By: Joshua Lev Krieger, Christopher Stanton and James Barnett
  • Catalys Pacific By: Joshua Lev Krieger
  • Forecasting ClimaCell By: Joshua Lev Krieger, Christopher Stanton and James Barnett
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College