Selling Innovation in Bankruptcy

Ma, Song; Tong, Joy Tianjiao; Wei, Wang

doi:10.2139/ssrn.2903003

Cited by 10 publications

(7 citation statements)

References 84 publications

(111 reference statements)

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“…than let them remain as part of the going concern. Moreover, Ma, Tong, and Wang (2019) find that such selling firms underperform when they emerge from bankruptcy. Concerns about creditor power may thus deter borrowers from offering security unless in extremis.…”

Section: B Excessive Lender Power and Loss Of Operational Flexibilitymentioning

confidence: 97%

The Decline of Secured Debt

BENMELECH,

KUMAR,

RAJAN

2024

The Journal of Finance

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The share of secured debt issued (as a fraction of total corporate debt) declined steadily in the United States over the twentieth century. This stems partly from financial development giving creditors greater confidence that high‐quality borrowers will respect their claims even if creditors do not obtain security upfront. Consequently, such borrowers prefer retaining financial flexibility by not giving security up front. Instead, security is given contingently–when a firm approaches distress. This also explains why, superimposed on the secular decline, the share of secured debt issued is countercyclical.This article is protected by copyright. All rights reserved

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Section: B Excessive Lender Power and Loss Of Operational Flexibilitymentioning

confidence: 97%

The Decline of Secured Debt

BENMELECH,

KUMAR,

RAJAN

2024

The Journal of Finance

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“…Although extant research has focused on the motivation of financially distressed firms, as opposed to entrepreneurs, in patent selling, the concept remains the same (Caviggioli & Ughetto, 2013; Ma, Tong, & Wang, 2019). Firms sell some of their assets (in the case of patents, their valuable intangible assets) to alleviate the challenges posed by their weak financial position.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Pipes, prisms, and patent sales: How personal wealth expands and contracts the gender gap in entrepreneurship

McGrath

Chen

Nerkar

2022

Strategic Entrepreneurship

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“…Since their estimation of depreciation parameters for R&D is derived from a representative set of firms (from a small 27 CRSP delisting codes of 2 and 3. 28 Ma, Tong, and Wang (2019) show that assuming a value of zero for intangibles is incorrect because innovation is a crucial asset class in asset allocation in bankruptcy. 29 We obtain recovery rates via the "Ultimate Recovery" file from Moody's Default and Recovery database.…”

Section: Sample Selectionmentioning

confidence: 99%

Measuring Intangible Capital with Market Prices

Ewens¹,

Peters²,

Wang³

2020

Preprint

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Existing standards prohibit disclosures of internally created intangible capital to firm balance sheets, resulting in a downward bias of reported assets. To characterize off-balance sheet intangible assets, we use transaction prices to estimate this missing intangible capital. On average, our new measure of intangible capital is 10\% smaller than prior estimates, while varying more by industry. These estimates better explain market values, increase HML portfolio returns, act as a better proxy for human capital and brand rankings, and exhibit a strong association with patent values.

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Selling Innovation in Bankruptcy

Cited by 10 publications

References 84 publications

The Decline of Secured Debt

The Decline of Secured Debt

Pipes, prisms, and patent sales: How personal wealth expands and contracts the gender gap in entrepreneurship

Measuring Intangible Capital with Market Prices

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