I am a Ph.D. candidate in the finance area at UCLA Anderson School of Management. My research interests are in corporate finance, governance, and innovation. My job market paper studies financial constraints on R&D investments for mature, patent-practicing firms during a profit windall event, which arose from an unexpected provision in U.S. patent law that extended the life of patents owned that were about to expire.
I will be available for interviews at the 2017 AFA meeting in Chicago, Illinois (January 6-8).
Profit Windfalls and Investment Channels in Innovation: Evidence from Patent Term Extensions (Job Market Paper)
I show that capital expenditure, debt issuance, and patent acquisitions are sensitive to cash flow for mature innovating firms. By exploiting the random timing of patent term expiry dates and their unexpected extensions around the adoption of a provision in the Uruguay Round Agreements Act, I find that a one standard deviation increase in the citation-weighted patent portfolio share of term-extended patents leads to an increase in cash flow by 1.5 percent of book assets. Given these windfall profits, I find evidence of physical capital investment, debt issuance reduction, and acquisitions of external technology. Internal investments in R&D, on the other hand, show no response, suggesting high R&D adjustment costs for large, mature firms.