Events

Dr. Esther Ann Bøler
Assistant Professor
Imperial College Business School

Since the turn of the century, firms in developed economies invest more in intangible capital than in physical capital. Yet firms that are intangible-intensive might struggle to get access to external financing. In this paper we use unusually detailed data on Norwegian firms to investigate a set of questions: Do intangible-intensive and innovative firms appear to be credit constrained? Is this particularly true for younger firms? Does improved access to financing improve their performance? To answer these questions, we exploit a reform that was introduced in 2015, allowing firms to use patents as standalone collateral. Our results indicate that innovative firms are financially constrained. After the reform was introduced, we see an increase in the number of firms with bank debt, and an increase in firms’ bank debt relative to sales, and in the number of bank connections for the treatment group relative to the control group. Their share of short term debt decreases, and young firms see a decline in equity share. We find that the reform also has real economy effects. Young firms, in particular, increase employment and investments in intangible capital and become more likely to export and import.

This is a joint seminar organized by HKU, CUHK, City U, HKUST and Lingnan U.

Please contact Xiameng PAN at xmpan@connect.hku.hk for registration.