Patent pledgeability, trade secrecy, and corporate patenting

Yanke Dai, Ting Du, Huasheng Gao, Yan Gu and Yongqin Wang

Journal of Corporate Finance, 2024, vol. 85, issue C

Abstract: We identify a positive effect of patent pledgeability on corporate patenting. Our tests exploit staggered city-level policy changes that allow firms to use patents as collateral for financing. We find a significant increase in patents and patent citations for firms headquartered in cities that have adopted such policies relative to firms headquartered in cities that have not. We further show that patent pledgeability increases corporate patenting by inducing firms to shift from secrecy-based innovation to patent-based innovation, rather than by mitigating financial constraints.

Keywords: Innovation; Patent collateral; Pledgeability; Secrecy; Intangible assets (search for similar items in EconPapers)
JEL-codes: G38 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:85:y:2024:i:c:s0929119924000257

DOI: 10.1016/j.jcorpfin.2024.102563

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