refer to this behavior as financing innovation with innovation. Drawing on patent collateral data from the US and China, we … US firms, (3) firms increase their borrowing and innovation activities once they start to engage in patent collateral. We … investment, and borrowing constrained by patent collateral. The model emphasizes two frictions that hinder the use of patent …

-excludability and spillover of uncertain knowledge due to imperfect IPR (Intellectual Property Rights, e.g. patent) protection. Facing a …. Broader patent rights should be granted when the uncertainty of innovation is high, although the "Rush" prevention can induce … more patent race at the early R&D stage, i.e. Rush-Race shifting …