Green patents as collateral in Iraq: How environmental innovation assets ease credit rationing - An applied econometric study

This paper examines whether green patents, which are environmentally oriented intellectual property assets, could be taken as collateral to lessen credit rationing among the Iraq based firms. With insights into the strains of economic reconstruction after conflicts and environmental degradation, the analysis relies on applied econometric modelling after 2010-2025 forecast using firm-level data, patent data is activated at both the Iraqi Patent office and WIPO, and macroeconomic indicators. The authors can use the R results to test the influence of the green patent ownership on loans approval rates, credit rationing indices, and credit loan amount with a panel data regression, logit models and instrumental variable method. Conversely, the results indicate that the green patents find no statistically significant effects in supporting credit constriction in Iraq. It is also said that one cannot speculate the size, profitability and also age of the firm and all the specifiable factors on credit rationing is the only important one that is inflation. These results highlight a lack of the linking between the financial incentives and banking sector structure in Iraq in case of environment innovation. The intellectual property and collateral framework and the green credit policies, as well as the opening of the doors at the sustainable innovative finance are set as the institutional reform which is supposed in the study by improving the system of the patent valuation. Unique Contribution: It is the first article aimed empirically at investigating the possibility of having the exploitation of green patents as a type of collateral in a post-war, oil-reliant economy and provides some evidence in the example of Iraq where support institutions of intellectual property have not yet reached full development. It outlines the policy and infrastructure gaps that are stopping innovations based lending, and gives us a roadmap of how to transform the Iraqi financial system to be in line with the global green practices in finance.