Scholarly record
INTELLECTUAL PROPERTY ASSETS AS LOAN COLLATERAL: A NEGATIVE MUTATION OR A FINANCING INNOVATION?
Abstract
The innovativeness in a company is part of its intellectual capital and the latter is proxied and measured by the underlying company’s intangible assets. The concept “intellectual capital” contains all the knowledge and experience a company’s employees have, the information and the intellectual property that are combined and create wealth for that company and can be proxied by the value of a company’s intangible assets. After the 1990s the issue of intellectual property has been the focus not only of the researchers in Economics and Law, but also in Finance. Intellectual property had begun to be used as collateral in order for the firms to raise external capital in addition to the tangible assets they had already been using. Therefore, it has been considered a key element in corporate strategy and management, affecting company valuation, risk and ratings in the stock markets. This paper discusses some legal issues on intangible assets, their reporting requirements and reviews the academic literature of using intellectual property as collateral for corporate loans, that exists for the US and the UK markets. There are studies that regard the issue of using intangible assets as loan collateral as problematic for the underlying company distorting its ability to borrow needed capital funds, characterizing it as a negative mutation and there are studies that regard the issue of using intangible assets as loan collateral positively, as a financing innovation. In this paper both sides are presented in an effort to familiarize the interested parties about another source of financing in developed markets so far and in developing markets in the future. The conclusion is that banking practice, regulation and public policy have to coordinate to solve the problems and difficulties that arise from having intangibles as loan collateral.
Publication Impact Profile
Publication details
ReferencesPending
Structured references will appear here after the reference import pass. The count is preserved now so the scholarly record is not incomplete.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.