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Licensing of university inventions: The role of a technology transfer office

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  • Macho-Stadler, Ines
  • Perez-Castrillo, David
  • Veugelers, Reinhilde

Abstract

We provide a theoretical model which helps to explain the specific role of TTOs. Using a framework where firms have incomplete information on the quality of inventions, we develop a reputation argument for the TTO to reduce the asymmetric information problem. Our results indicate that a TTO is often able to benefit from its capacity to pool innovations across research units (and to build a reputation) within universities. It will have an incentive to 'shelve' some of the projects, thus raising the buyer s beliefs on expected quality, which results in fewer but more valuable innovations being sold at higher prices. We explain the importance of a critical size for the TTO in order to be successful as well as the stylized fact that TTOs may lead to fewer licensing agreements, but higher income from innovation transfers.
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Suggested Citation

  • Macho-Stadler, Ines & Perez-Castrillo, David & Veugelers, Reinhilde, 2007. "Licensing of university inventions: The role of a technology transfer office," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 483-510, June.
  • Handle: RePEc:eee:indorg:v:25:y:2007:i:3:p:483-510
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