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Internal Finance and Patents - evidence from firm-level data

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Listed author(s):
  • Martinsson, Gustav

    ()

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Lööf, Hans

    ()

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

We find that internal finance resources at the firm-level, measured by cash flow, play a non-trivial role for the number of patent applications, even after controlling for the standard variables of a patent study. The results are based on estimating panel count-data models on a sample of 2,700 Swedish manufacturing firms, with observations from the period 1997-2005. The cash-flow effect is larger during the aftermath of the bursting IT-bubble and for firms that are more likely to be financially constrained. Our results suggest that some firms reduce or stop applying for patents during periods of declining economic activity.

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Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 194.

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Length: 23 pages
Date of creation: 28 Sep 2009
Handle: RePEc:hhs:cesisp:0194
Contact details of provider: Postal:
CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/

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Keywords: Financing constraints; Innovation; Corporate ownership; Intellectual property rights; Firm level panel data;

Find related papers by JEL classification:

  • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
  • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
  • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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