Dear Colleagues,
Our next virtual seminar in the Entrepreneurship and Innovation Policy Research series is Wednesday, April 8 from 11:00-12:00 ET. Sukhun Kang (University of California Santa Barbara) - will present "Data Privacy Regulation and Innovation" (with Jennifer Kao, UCLA). Abstract is below. Click the link HERE to register for the April 8th seminar.
We hope you join us!
- Tim Folta (UCONN), Maryann Feldman (ASU), and Supradeep Dutta (Rutgers U)
Abstract: This paper examines how data privacy regulations shape innovation. While data privacy regulations are designed to increase data security, they also introduce compliance costs and coordination challenges in settings where collecting, analyzing, and sharing sensitive data is central to innovation. We examine the effect of the European Union (EU)'s General Data Protection Regulation (GDPR), the largest data privacy law to date, on the pharmaceutical industry. We find that a significant decline in clinical trial activity among firms more exposed to the reform. Firms reduced both the scale and scope of their trials, enrolling fewer patients, targeting fewer diseases, and operating across fewer sites. While collaborative activity declined overall, we provide evidence that firms adapted by shifting toward existing (rather than new) research collaborators. These findings highlight how data privacy regulations can shape not only the rate of R&D, but also the composition of firms' R&D activities and the organizational contexts in which innovation is ultimately pursued.
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