Strict liability and consumer product innovation: results from a cross-industry pilot study
by Maria Papadakis, Frances E. Zollers, Sandra N. Hurd
International Journal of Materials and Product Technology (IJMPT), Vol. 11, No. 5/6, 1996

Abstract: We report here the results of a pilot study on the impact of strict liability on consumer product innovation in US businesses. Our research takes advantage of a unique historical event: the introduction of strict liability in the European Union (EU) in 1985. The adoption of a strict liability doctrine in the EU allows us to observe directly whether corporate innovation practices are sensitive to liability influences. We surveyed two US consumer products industries as test cases for a more comprehensive study that is currently under way. Based on the findings from these two industries (lawn and garden equipment, and toys), it appears that strict liability does not have a negative impact on US business: liability did not appear to cause firms to exit the EU market, to create a barrier to entry in the EU market, reduce our firms' market share in the EU, or inhibit their innovativeness. Our findings reinforce the impression that liability does not intrinsically inhibit innovation or competitiveness, and in fact stimulates certain kinds of innovations.

Online publication date: Tue, 02-Nov-2010

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