Abstract

<p>This study was conducted to analyze the impact of corporate patents on the cost of debt for companies listed on the securities market of the Korea Exchange from 2010 to 2021. It was found that corporate patents have a significant impact on the borrowing rate and the interest rate spread, and the results were consistent in the robustness test that took into account endogeneity. This showed the positive impact of innovation activities on reducing the cost of debt and the effect of innovation on reducing the cost of debt, suggesting that active innovation efforts can increase the profitability and financial stability of companies and that innovation can contribute to business sustainability and reduce the risk of insolvency, thereby improving the credit rating and reducing the cost of debt. Through continuous innovation activities such as research and development, firms can send positive signals to the stock market, which in turn facilitates financing and reduces the cost of capital, and this helps increase the competitiveness of the company and lower the risk of insolvency.</p>