jennifer kao

Abstract

How does comprehensive and detailed basic scientific information shape private sector research invest- ment? I assess the impact of large-scale cancer genome mapping studies, which systematically map the genetic abnormalities in cancer. Using newly-constructed data from cancer genome mapping studies and clinical trials, I find that publicly available mapping information increases private investment in clinical trials by 50 percent and is disproportionately likely to spur trials evaluating drugs approved or previously tested for one disease in an additional disease. I find evidence that cancer maps improve firms’ decision quality: when genetic information is known, firms are more likely terminate drug invest- ments that are unlikely to be successful in the long run and to continue investment projects that are most likely to generate promising clinical results.