IDEAS home Printed from https://ideas.repec.org/p/wso/wpaper/11.html
   My bibliography  Save this paper

The design of licensing contracts: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany

Author

Listed:
  • Carsten Burhop

    (University of Cologne)

  • Thorsten Luebbers

    (MPI for Collective Goods Bonn)

Abstract

We investigate a sample of 180 technology licensing contracts closed by German chemical, pharmaceutical, and electrical engineering companies between 1880 and 1913. Our empirical results suggest that strategic behaviour seems to be relevant for the design of licensing contracts, whereas inventor moral hazard and risk aversion of licensor or licensee seem to be irrelevant. Moreover, our results suggest that uncertainty regarding the profitability of licensed technology influenced the design of licensing contracts. More specifically, profit sharing agreements or producer milestones were typically included into licensing contracts.

Suggested Citation

  • Carsten Burhop & Thorsten Luebbers, 2011. "The design of licensing contracts: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany," Cologne Economic History papers 11, University of Cologne, Department of Economic and Business History, revised Jun 2011.
    • Handle: RePEc:wso:wpaper:11
    as

    Download full text from publisher

    File URL: http://wigesch.uni-koeln.de/fileadmin/FTP/RePEc/wso/wpaper/CEH_2011_2.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ritter, Jay R., 2005. "Economic growth and equity returns," Pacific-Basin Finance Journal, Elsevier, vol. 13(5), pages 489-503, November.
    2. Luigi Zingales, 2009. "The Future of Securities Regulation," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 391-425, May.
    3. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 2006. "What Works in Securities Laws?," Journal of Finance, American Finance Association, vol. 61(1), pages 1-32, February.
    4. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
    5. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    6. David Chambers & Elroy Dimson, 2009. "IPO Underpricing over the Very Long Run," Journal of Finance, American Finance Association, vol. 64(3), pages 1407-1443, June.
    7. René M. Stulz, 2009. "Securities Laws, Disclosure, and National Capital Markets in the Age of Financial Globalization," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 349-390, May.
    8. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    9. Priya P. Lele & Mathias M. Siems, 2009. "Shareholder Protection: A Leximetric Approach," Chapters, in: Thankom Gopinath Arun & John Turner (ed.), Corporate Governance and Development, chapter 10, Edward Elgar Publishing.
    10. Julian Franks & Colin Mayer & Stefano Rossi, 2009. "Ownership: Evolution and Regulation," The Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 4009-4056, October.
    11. Fohlin,Caroline, 2011. "Finance Capitalism and Germany's Rise to Industrial Power," Cambridge Books, Cambridge University Press, number 9780521396608.
    12. Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2008. "The law and economics of self-dealing," Journal of Financial Economics, Elsevier, vol. 88(3), pages 430-465, June.
    13. David Chambers, 2009. "Gentlemanly capitalism revisited: a case study of the underpricing of initial public offerings on the London Stock Exchange, 1946–861," Economic History Review, Economic History Society, vol. 62(s1), pages 31-56, August.
    14. Fohlin, Caroline, 2002. "Regulation, taxation and the development of the German universal banking system, 1884–1913," European Review of Economic History, Cambridge University Press, vol. 6(2), pages 221-254, August.
    15. Tim Loughran & Jay Ritter, 2004. "Why Has IPO Underpricing Changed Over Time?," Financial Management, Financial Management Association, vol. 33(3), Fall.
    16. Burhop, Carsten & Wolff, Guntram B., 2005. "A Compromise Estimate of German Net National Product, 1851–1913, and its Implications for Growth and Business Cycles," The Journal of Economic History, Cambridge University Press, vol. 65(3), pages 613-657, September.
    17. Fama, Eugene F. & French, Kenneth R., 2004. "New lists: Fundamentals and survival rates," Journal of Financial Economics, Elsevier, vol. 73(2), pages 229-269, August.
    18. Simon, Carol J, 1989. "The Effect of the 1933 Securities Act on Investor Information and the Performance of New Issues," American Economic Review, American Economic Association, vol. 79(3), pages 295-318, June.
    19. Elizabeth Demers & Philip Joos, 2007. "IPO Failure Risk," Journal of Accounting Research, Wiley Blackwell, vol. 45(2), pages 333-371, May.
    20. Richard B. Carter & Frederick H. Dark & Ajai K. Singh, 1998. "Underwriter Reputation, Initial Returns, and the Long-Run Performance of IPO Stocks," Journal of Finance, American Finance Association, vol. 53(1), pages 285-311, February.
    21. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
    22. Wasserfallen, Walter & Wittleder, Christian, 1994. "Pricing initial public offerings: Evidence from Germany," European Economic Review, Elsevier, vol. 38(7), pages 1505-1517, August.
    23. David Chambers, 2007. "Gentlemanly Capitalism Revisited: A Case Study of the Underpricing of Initial Public Offerings on the London Stock Exchange 1946-86," Economics Series Working Papers 253, University of Oxford, Department of Economics.
    24. Holmen, Martin & Hogfeldt, Peter, 2004. "A law and finance analysis of initial public offerings," Journal of Financial Intermediation, Elsevier, vol. 13(3), pages 324-358, July.
    25. Chambers, David, 2010. "Going public in interwar Britain1," Financial History Review, Cambridge University Press, vol. 17(1), pages 51-71, April.
    26. Julian Franks & Colin Mayer & Hannes Wagner, 2006. "The Origins of the German Corporation - Finance, Ownership and Control," Review of Finance, European Finance Association, vol. 10(4), pages 537-585, December.
    27. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carsten Burhop & David Chambers & Brian Cheffins, 2011. "Is Regulation Essential to Stock Market Development? Going Public in London and Berlin, 1900-1913," Cologne Economic History papers 10, University of Cologne, Department of Economic and Business History, revised Mar 2011.
    2. Carsten Burhop & David Chambers & Brian Cheffins, 2011. "Is Regulation Essential to Stock Market Development? Going Public in London and Berlin, 1900-1913," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_15, Max Planck Institute for Research on Collective Goods.
    3. Sebastian A.J. Keibek, 2016. "Using probate data to determine historical male occupational structures," Working Papers 26, Department of Economic and Social History at the University of Cambridge, revised 21 Mar 2017.
    4. David Chambers & Carsten Burhop & Brian Cheffins, 2016. "The Rise and Fall of the German Stock Market, 1870-1938," Working Papers 25, Department of Economic and Social History at the University of Cambridge, revised 21 Sep 2016.
    5. Espenlaub, Susanne & Goyal, Abhinav & Mohamed, Abdulkadir, 2016. "Impact of legal institutions on IPO survival: A global perspective," Journal of Financial Stability, Elsevier, vol. 25(C), pages 98-112.
    6. Carsten Burhop, 2011. "The Underpricing of Initial Public Offerings at the Berlin Stock Exchange, 1870–96," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 11-32, February.
    7. Mattia Cattaneo & Michele Meoli, 2013. "Investor protection and IPO survival in the Italian stock market," Chapters, in: Mario Levis & Silvio Vismara (ed.), Handbook of Research on IPOs, chapter 7, pages 141-158, Edward Elgar Publishing.
    8. Allen, Franklin & Chakrabarti, Rajesh & De, Sankar & Qian, Jun “QJ” & Qian, Meijun, 2012. "Financing firms in India," Journal of Financial Intermediation, Elsevier, vol. 21(3), pages 409-445.
    9. John Armour & Simon Deakin & Prabirjit Sarkar & Mathias Siems & Ajit Singh, 2009. "Shareholder Protection and Stock Market Development: An Empirical Test of the Legal Origins Hypothesis," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 6(2), pages 343-380, June.
    10. Sibylle H. Lehmann, 2014. "Taking firms to the stock market: IPOs and the importance of large banks in imperial Germany, 1896–1913," Economic History Review, Economic History Society, vol. 67(1), pages 92-122, February.
    11. Gur Aminadav & Elias Papaioannou, 2020. "Corporate Control around the World," Journal of Finance, American Finance Association, vol. 75(3), pages 1191-1246, June.
    12. Mr. Luc Laeven, 2014. "The Development of Local Capital Markets: Rationale and Challenges," IMF Working Papers 2014/234, International Monetary Fund.
    13. Cumming, Douglas & Knill, April & Richardson, Nela, 2015. "Firm size and the impact of securities regulation," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 417-442.
    14. Espenlaub, Susanne & Goyal, Abhinav & Mohamed, Abdulkadir, 2020. "The impact of shareholders and creditors rights on IPO performance: An international study," The British Accounting Review, Elsevier, vol. 52(1).
    15. Steen Thomsen & Frederik Vinten, 2014. "Delistings and the costs of governance: a study of European stock exchanges 1996–2004," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(3), pages 793-833, August.
    16. Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.
    17. Lucian A. Bebchuk & Michael S. Weisbach, 2012. "The State of Corporate Governance Research," Springer Books, in: Sabri Boubaker & Bang Dang Nguyen & Duc Khuong Nguyen (ed.), Corporate Governance, edition 127, pages 325-346, Springer.
    18. Quentin Dupont & Jonathan M. Karpoff, 2020. "The Trust Triangle: Laws, Reputation, and Culture in Empirical Finance Research," Journal of Business Ethics, Springer, vol. 163(2), pages 217-238, May.
    19. Engelen, Peter-Jan & van Essen, Marc, 2010. "Underpricing of IPOs: Firm-, issue- and country-specific characteristics," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1958-1969, August.
    20. Roe, Mark J. & Siegel, Jordan I., 2011. "Political instability: Effects on financial development, roots in the severity of economic inequality," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 279-309, September.

    More about this item

    Keywords

    Economic History; Germany; pre-1913; Licensing contracts; Technology transfer.;
    All these keywords.

    JEL classification:

    • N83 - Economic History - - Micro-Business History - - - Europe: Pre-1913
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wso:wpaper:11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Johannes Press (email available below). General contact details of provider: https://edirc.repec.org/data/sgkoede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.