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Licensing and the Incentive for Innovation

Author

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  • Arijit Mukherjee

    (Department of Economics, Keele University, Keele,)

  • Soma Mukherjee

    (Department of Economics, Keele University, Keele,)

Abstract

Previous 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.

Suggested Citation

  • Arijit Mukherjee & Soma Mukherjee, 2002. "Licensing and the Incentive for Innovation," Keele Economics Research Papers KERP 2002/17, Centre for Economic Research, Keele University.
    • Handle: RePEc:kee:kerpuk:2002/17
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    Cited by:

    1. Chang, Ray-Yun & Hwang, Hong & Peng, Cheng-Hau, 2013. "Technology licensing, R&D and welfare," Economics Letters, Elsevier, vol. 118(2), pages 396-399.
    2. Arijit Mukherjee & Soma Mukherjee, 2008. "Excess‐Entry Theorem: The Implications Of Licensing," Manchester School, University of Manchester, vol. 76(6), pages 675-689, December.

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    More about this item

    Keywords

    Licensing; R&D; Welfare;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - 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, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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