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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 Paris I - Panthéon-Sorbonne)

  • Jean-Bernard Chatelain

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Kirsten Ralf

    ()
    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

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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File URL: http://halshs.archives-ouvertes.fr/docs/00/11/25/18/PDF/rd35RES.pdf
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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00112518.

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

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00112518
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Related research

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

References

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  1. Christian Keuschnigg, 2002. "Venture Capital Backed Growth," CESifo Working Paper Series 664, CESifo Group Munich.
  2. Benhabib, Jess & Spiegel, Mark M, 2000. " The Role of Financial Development in Growth and Investment," Journal of Economic Growth, Springer, vol. 5(4), pages 341-60, December.
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