Working Paper: NBER ID: w30594
Authors: Andrew W. Lo; Richard T. Thakor
Abstract: We review the literature on financial intermediation in the process by which new medical therapeutics are financed, developed, and delivered. We discuss the contributing factors that lead to a key finding in the literature—underinvestment in biomedical R&D—and focus on the role that banks and other intermediaries can play in financing biomedical R&D and potentially closing this funding gap. We conclude with a discussion of the role of financial intermediation in the delivery of healthcare to patients.
Keywords: financial intermediation; biomedical innovation; funding gap; healthcare delivery
JEL Codes: D21; G21; G24; G31; G32; L65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Financial Intermediaries (G23) | Biomedical R&D Funding (O32) |
| Banks (G21) | Financing Frictions (G19) |
| Banks' Relationship Lending (G21) | Non-Pledgeability (G33) |
| Financial Intermediaries (G23) | Underinvestment in Biomedical Innovation (O39) |
| Financial Intermediaries (G23) | Lifesaving Therapies Development (I19) |