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"Deep Pockets'', Collateral Assignments of Patents, and the Growth of Innovations

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Author Info
Bruno Amable () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
Jean-Bernard Chatelain () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
Kirsten Ralf () (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Normale Supérieure de Paris - ENS Paris)

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Abstract

This paper studies how the imperfect collateral assignments of patents contribute to "deep pockets'' savings of innovative firms facing random investment opportunities in research and development (R&D) and determine the growth of their innovations, using a version of the Kiyotaki and Moore [1997] model of credit cycles. Results are: patents as collateral leverage R&D finance and magnify the effect of innovative rents on investment; the composition of current versus future financial constraints implies that firms savings decrease the steady state aggregate debt/patent ratio; the interaction between households and firms savings determines a leveraged growth of innovations which increasing when legal reforms reduce the imperfection of patents as collateral.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00112518_v1.

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Date of creation: 08 Nov 2006
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Handle: RePEc:hal:cesptp:halshs-00112518_v1

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Related research
Keywords: Collateral; Patents; Research and Development; Credit rationing; Growth;

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