Topic: Learning from Failure: The Role of Disclosure on Innovation

Date & Time: 13:00-14:00  May 6, 2026

Venue: 245 Room Quanxue Building

Organizers: School of Accounting, Dongbei University of Finance and Economics; Liaoning Province Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract：

This paper examines how the disclosure of failed R&D outcomes shapes future innovation. I use an exogenous policy change that expanded the dissemination of failure information from clinical trials to study this trade-off. The number of new trials initiated increased following the policy change. The increase is driven primarily by incremental innovations on existing drugs rather than developments of new drugs, as failure disclosure provides more information on previously tested drugs but not on new chemical compounds. Consistent with the knowledge spillover effect, trial sponsors benefit more in medical fields where they had less internal expertise prior to the policy change. Despite the proprietary costs for disclosing entities, my findings support that the positive externality of mandatory failure disclosure outweighs its costs in the short run.

Introduction of Speaker:

Menghan WANG, a PhD candidate in Finance at The University of Hong Kong, visited Boston College as a visiting scholar. She has presented papers at international conferences including NBER, AFA, FMA, and NFA, and received a nomination for the FMA Best Paper Award in Corporate Finance. She has also served as an invited reviewer for the Journal of Accounting, Auditing & Finance.