Financing Innovative Activity and the Endogeneity of Patenting

• 成果类型: Article
• 署名作者: Marquez, Robert; Nguyen, Thanh; Yavuz, M. Deniz
• 署名单位: University of California System; University of California Davis; Purdue University System; Purdue University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.00744
• 发表日期: 2024
• 页码: 6874-6896
• 关键词: financing of innovation; endogeneity of patenting decision; debt; incomplete contracts

摘要

It is common for lenders to require innovative firms to report all innovations and take actions, such as patenting, to protect their value. However, many future innovations are difficult to verify, making enforcement of such requirements difficult. This creates a tension for firms between protecting their innovations through patenting and creating assets that can be liquidated by a lender when not fully repaid. We show that the endogeneity of the patenting decision introduces an upper bound on the long-term payments that can be credibly promised to a lender, affecting the feasibility of obtaining financing and the terms of financial contracts.