Diffused Errors along Technology Spillovers: Evidence from the 510(k) Medical Device Market

Event Date: 17 January 2024

Speaker: Seungjoon Oh (Peking University)

Venue: Strathclyde Business School, Cathedral Wing, CW406B

Time: 2pm

Abstract:

To examine consequences of technical errors through spillovers, we track the knowledge flows in medical devices using the predicate list in the 510(k) program in which a new device is substantially equivalent to existing ones (i.e., predicates). We match a recalled device with its unrecalled “sibling” that shares the same unrecalled predicate as a common source. We find that the follow-on devices that follow a recalled device as are more likely to be recalled and have more adverse events than those following its unrecalled sibling. Diffused errors negatively influence firms’ growth and future inventions while providing competitors with market opportunities.

Published: 11 January 2024