Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271964 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10320
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation and productivity. Using matched firm-bank data for Norway, we find that bank borrowing increased for firms affected by the reform relative to the control group. We also find an increase in the capital stock, employment and innovation as well as equity funding. We interpret the results through the lens of a model of monopolistic competition with potentially collateral constrained heterogeneous firms. Parameterizing the model using well-identified moments from the reduced form exercise, we find quantitatively large gains in output per worker in the sectors in the economy dominated by constrained (and intangible-intensive) firms. The gains are primarily driven by capital deepening, whereas within-industry misallocation plays a smaller role.
Subjects: 
intangible capital
patents
credit constraints
misallocation
productivity
JEL: 
D25
G32
L25
L26
O34
O47
Document Type: 
Working Paper
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