Volkswirtschaftliche Fakultät - Digitale Hochschulschriften der LMU

Knowledge and knowledge-based value creation processes play an increasing role in modern economies. In the last two decades investments in knowledge have gained importance relative to investments in physical assets. The OECD reports that private and public investments in knowledge as percentage of GDP have increased by 0.7 percentage points in OECD countries during the years 1997-2004. At the same time, investments in physical assets such as machinery and equipment have decreased by 1.1 percentage points. The increasing importance of intangible assets in the value creation process presents a significant challenge for innovation policies in knowledge-based economies. Innovative firms that intensely invest in research and development (R&D) highly rely on intangible assets and are faced with serious market failures. These frictions can restrict R&D intensive firms' innovation and internationalization activities and are expected to hamper overall technological progress and economic growth.

Imperfect financial markets that are characterized by information asymmetries can restrict the access to finance for R&D intensive start-up firms. These firms have only short track records and due to their focus on R&D, they have only few tangible assets that can be used as collateral for financial investors. Thus, financial frictions are particularly severe for new firms and firms undertaking innovative activities (Hall and Lerner, 2009). At the same time, young and small firms significantly contribute to technological progress and economic growth (OECD, 2013). Financial constraints restrain the innovation activities of these firms and result in an overall decelerated rate of innovation and a slowdown in economic progress.

Further, R&D intensive firms additionally face the problem that their created knowledge exhibits the characteristics of public goods. Once information on inventions is revealed, the knowledge is non-rival and non-excludable. A sufficient patent protection is necessary to maintain investment incentives and to overcome problems of underinvestment. In their internationalization strategy, R&D intensive firms have to consider that patent law is a territorial concept, i.e., the scope of patent protection is limited to the territory of the country where the right is granted. The foundation of a foreign affiliate represents a transaction, whereby sensitive knowledge is transferred outside the firm and intangible assets are exposed to a high risk of infringement. A lacking or insufficient patent protection in host countries can distort global investment decisions and prevent profitable projects. Particularly R&D intensive multinational firms that intensely rely on intangible assets are expected to be highly affected by these frictions. Distorted investments could adversely affect a firm's growth and restrict the technological progress in host countries.

This dissertation attempts to shed more light onto these market imperfections, which are aggravated by firms' reliance on intangible assets and are expected to adversely affect firms' innovation and internationalization strategy. The first two chapters deal with frictions in financial markets. Chapter 1 takes a step back and investigates how access to finance can be precisely measured. A precise measurement is essential to design effective policy measures in order to foster access to finance. On the basis of these findings, Chapter 2 considers the access to external finance of R&D intensive start-up firms and empirically investigates whether patents can mitigate financial frictions of these innovative firms. The third chapter considers frictions in the internationalization strategies of R&D intensive firms. It empirically investigates, whether a strengthening of national patent law affects the global investment decision of multinationals and encourages foreign direct investment.

The first chapter is concerned with the empirical methodology of measuring access to fin