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

Bruno Amable (1) , Jean-Bernard Chatelain (1) , Kirsten Ralf (2)

1 CES - Centre d'économie de la Sorbonne
2 PJSE - Paris-Jourdan Sciences Economiques

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.

Mots clés: Collateral; Patents; Research and Development; Credit rationing; Growth

Domaines: Economies et finances

Bruno Amable, Jean-Bernard Chatelain, Kirsten Ralf. "Deep Pockets'', Collateral Assignments of Patents, and the Growth of Innovations. 2006. ⟨halshs-00112518⟩