{"title":"Intellectual Property Rights and Debt Financing","authors":"Paula Suh","doi":"10.1093/rfs/hhac067","DOIUrl":null,"url":null,"abstract":"\n I examine how the investment and financing of innovation are affected by the contractual allocation of intellectual property rights using a Federal Circuit ruling that strengthened firms’ property rights to employee patents. I find that treatment firms’ total debt-to-assets ratio and R&D spending increase by 18% and 9%, respectively, as the residual control over patents increases firms’ incentives to innovate. These effects are more pronounced when ex ante holdup exposure is high. Furthermore, I find a positive marginal effect of asset complementarity as it limits the decline in employee incentives. Consistently, I show that firms’ ex post asset complementarity improves.","PeriodicalId":21124,"journal":{"name":"Review of Financial Studies","volume":null,"pages":null},"PeriodicalIF":6.8000,"publicationDate":"2022-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Financial Studies","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1093/rfs/hhac067","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 1
Abstract
I examine how the investment and financing of innovation are affected by the contractual allocation of intellectual property rights using a Federal Circuit ruling that strengthened firms’ property rights to employee patents. I find that treatment firms’ total debt-to-assets ratio and R&D spending increase by 18% and 9%, respectively, as the residual control over patents increases firms’ incentives to innovate. These effects are more pronounced when ex ante holdup exposure is high. Furthermore, I find a positive marginal effect of asset complementarity as it limits the decline in employee incentives. Consistently, I show that firms’ ex post asset complementarity improves.
期刊介绍:
The Review of Financial Studies is a prominent platform that aims to foster and widely distribute noteworthy research in financial economics. With an expansive editorial board, the Review strives to maintain a balance between theoretical and empirical contributions. The primary focus of paper selection is based on the quality and significance of the research to the field of finance, rather than its level of technical complexity. The scope of finance within the Review encompasses its intersection with economics. Sponsoring The Society for Financial Studies, the Review and the Society appoint editors and officers through limited terms.