Cerqueiro, Geraldo
[Verfasser:in]
;
Hegde, Deepak
[Sonstige Person, Familie und Körperschaft];
Penas, María Fabiana
[Sonstige Person, Familie und Körperschaft];
Seamans, Robert
[Sonstige Person, Familie und Körperschaft]
Erschienen in:TILEC Discussion Paper ; No. 2014-011
Umfang:
1 Online-Ressource (72 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2246982
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 18, 2016 erstellt
Beschreibung:
Firms' innovative activities can be sensitive to public policies that affect the availability of capital for risky projects. In this paper, we investigate the effects of regional and temporal variation in U.S. personal bankruptcy laws on firms' innovative activities. We find bankruptcy laws that provide stronger debtor protection decrease the number of patents produced by small firms. Stronger debtor protection also decreases the average quality, and variance in quality, of firms' patents. We find evidence that the negative effect of stronger debtor protection on experimentation and innovation may be due to the decreased availability of external finance in response to stronger debtor rights — an effect amplified in industries with a high dependence on external finance. Hence, while it is typically assumed that stronger debtor protection encourages innovation by reducing the cost of failure for innovators, we show that it can instead dampen innovative activities by tightening the availability of external finance to innovators