Licensing and the Incentive for Innovation
AbstractPrevious literature has mostly considered R&D and licensing activities separately. In this paper we examine the effect of licensing on R&D and social welfare.We show that the effect of licensing on the incentive for doing R&D is ambiguous and depends on the costs of doing R&D. We also show that the possibility of licensing can change the identity of the innovating firm. However, we find that social welfare is nondecreasing in presence of licensing.
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Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2002/17.
Length: 23 pages
Date of creation: Oct 2002
Date of revision:
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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