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Does technology licensing matter for privatization?

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  • Leonard F. S. Wang
  • Arijit Mukherjee
  • Chenhang Zeng

Abstract

In mixed oligopolies, technology licensing from a cost‐efficient firm to a cost‐inefficient firm has been widely observed. This paper examines the relationship between privatization and licensing (by public or private firms) with the consideration of either a domestic or a foreign private firm. We find that (a) in the case of a domestic private firm, public licensing facilitates privatization, but private licensing hinders privatization; (b) in the case of a foreign private firm, both public and private licensing facilitate privatization. Our results yield important policy implications on privatization.

Suggested Citation

  • Leonard F. S. Wang & Arijit Mukherjee & Chenhang Zeng, 2020. "Does technology licensing matter for privatization?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1462-1480, September.
  • Handle: RePEc:bla:jpbect:v:22:y:2020:i:5:p:1462-1480
    DOI: 10.1111/jpet.12431
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    References listed on IDEAS

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    Cited by:

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    2. Cho, Sumi & Kim, Doori & Lee, Sang-Ho, 2021. "Free licensing strategy and ex post privatization in a mixed oligopoly," MPRA Paper 106126, University Library of Munich, Germany.

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