The Real Effects of Equity Markets on Innovation
研究发现股市短期下跌会导致制药公司放弃早期药物研发，无论药物质量如何，这种融资约束驱动的行为可能阻碍救命药上市。
Abstract In theory, financial markets promote innovation by selectively allocating capital to high-quality projects. In this article, I show that equity markets can also inhibit innovation. In public firms, I find that short-term equity market declines cause pharmaceutical companies to abandon early-stage drug developments, irrespective of drug quality or changes in a firm’s stock price. I show that financing constraints drive this behavior, highlighting that even short-term market fluctuations can have long-term effects on pharmaceutical innovation and prevent potentially life-saving drugs from progressing to the market.