@techreport{NBERw10038,
 title = "Market Size in Innovation: Theory and Evidence From the Pharmaceutical Industry",
 author = "Daron Acemoglu and Joshua Linn",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "10038",
 year = "2003",
 month = "October",
 URL = "http://www.nber.org/papers/w10038",
 abstract = {This paper investigates the effect of (potential) market size on entry of new drugs and pharmaceutical innovation. Focusing on exogenous changes driven by U.S. demographic trends, we find that a 1 percent increase in the potential market size for a drug category leads to a 4 to 6 percent increase in the number of new drugs in that category. This response comes from both the entry of generic drugs and new non-generic drugs, and is generally robust to controlling for a variety of non-profit factors, pre-existing trends},
}