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Market structure and technology licensing: evidence from US manufacturing

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  • Youngjun Kim

Abstract

This paper empirically investigates how market structure, including firm- and industry-level variables, influences the incentives of companies to license out their technology. Empirical analysis is provided with the help of a panel data set of observed licensing transactions worldwide involving manufacturing companies publicly traded in the USA. The findings show that dominant firms with bigger market shares are actively involved in granting technology licenses. It was also found that company's prior involvement in licensing, the concentration and the market size of its primary industry, and the propensity to receive patents (i.e. strength of the intellectual property protection) in that industry are important determinants of the propensity to transfer technology through licensing agreements. Results suggest that transaction costs, strategic considerations, and knowledge appropriability weigh in heavily in explaining firms' licensing behaviour.

Suggested Citation

  • Youngjun Kim, 2004. "Market structure and technology licensing: evidence from US manufacturing," Applied Economics Letters, Taylor & Francis Journals, vol. 11(10), pages 631-637.
    • Handle: RePEc:taf:apeclt:v:11:y:2004:i:10:p:631-637
    DOI: 10.1080/1350485042000235675
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    Cited by:

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    2. Xue Yang & Hao Zhang & Die Hu & Bingde Wu, 2023. "The timing dilemma: understanding the determinants of innovative startups’ patent collateralization for loans," Small Business Economics, Springer, vol. 60(1), pages 371-403, January.
    3. Pedro Mendi, 2007. "Contractual implications of international trade in tacit knowledge," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1173-1183.
    4. Nishimura, Junichi & Okada, Yosuke, 2014. "R&D portfolios and pharmaceutical licensing," Research Policy, Elsevier, vol. 43(7), pages 1250-1263.
    5. Gnangnon, Sèna Kimm, 2023. "Do Aid for Trade flows affect Technology Licensing in Recipient Countries?," EconStor Preprints 273419, ZBW - Leibniz Information Centre for Economics.
    6. Florian Köhler, 2011. "Patent cross-licensing, the influence of IP interdependency and the moderating effect of firm size," The Journal of Technology Transfer, Springer, vol. 36(4), pages 448-467, August.

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