Strapped for cash: the role of financial constraints for innovating firms, misallocation and aggregate growth
File(s)
Accepted version
Author(s)
Boler, Esther
Moxnes, Andreas
Ulltveit-Moe, Karen Helene
Type
Journal Article
Abstract
We analyze the impact of reduced financial constraints on innovating firms’ performance and access to credit using a reform that allowed firms to use patents as collateral. We develop a theoretical framework to guide the analysis and quantify the aggregate impact of reduced financial constraints on misallocation and productivity by mapping data moments, reduced form results and model counterparts. Our empirical results suggest that reduced financial constraints led to an increase in firms’ capital stock and bank debt. Parameterizing the model we find quantitatively large gains in output per worker in the sectors of the economy dominated by constrained firms.
Date Acceptance
2026-03-04
Citation
American Economic Journal: Macroeconomics
ISSN
1945-7707
Publisher
American Economic Association
Journal / Book Title
American Economic Journal: Macroeconomics
Copyright Statement
Copyright This paper is embargoed until publication. Once published the author’s accepted manuscript will be made available under a CC-BY License in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy).
License URL
Publication Status
Accepted