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Title: The real effect of financial innovation : evidence from credit default swaps trading and corporate innovation
Authors: Chang, X
Chen, Y 
Wang, SQ
Zhang, K
Zhang, W
Keywords: Credit default swaps
Corporate innovation
Creditor-shareholder conflict
Issue Date: 2015
Source: The 23rd Conference on the Theories and Practices of Securities and Financial Markets (SFM 2015), Kaohsiung, Taiwan, 11-12 Dec 2015 How to cite?
Abstract: We document a positive effect of credit default swaps (CDS) trading on corporate innovation, i.e., firms generate more patents and patent citations after the initiation of CDS trading. The positive effect is more pronounced for firms relying more on external financing and those usingmore bank debt or short-term debt. These results suggest that CDSprotects creditors against borrowing firms’ default risk and mitigates creditors’ aversion towards firms’ risk taking, thereby enhancing corporate innovation.
Appears in Collections:Conference Paper

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