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Technology licensing under optimal tax policy

Author

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  • Arijit Mukherjee
  • Yingyi Tsai

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Abstract

This paper examines the role of government policy in technology licensing decision. We show that both the outside and the inside innovators license a new product (or drastic process innovation) to all potential licensees in the presence of tax/subsidy policies. An implication of our analysis is that a monopolist producer may prefer technology licensing in a homogeneous goods industry. Our results also provide a rationale for franchising to multiple sellers. Copyright Springer-Verlag 2013

Suggested Citation

  • Arijit Mukherjee & Yingyi Tsai, 2013. "Technology licensing under optimal tax policy," Journal of Economics, Springer, vol. 108(3), pages 231-247, April.
  • Handle: RePEc:kap:jeczfn:v:108:y:2013:i:3:p:231-247
    DOI: 10.1007/s00712-012-0277-5
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Neelanjan Sen & Rajit Biswas, 2017. "Indirect Taxes in Oligopoly in Presence of Licensing Opportunities," Journal of Industry, Competition and Trade, Springer, vol. 17(1), pages 61-82, March.
    2. Kim, Seung-Leul & Lee, Sang-Ho, 2016. "Environmental policy on the fixed-fee licensing of eco-technology under foreign penetration," MPRA Paper 84412, University Library of Munich, Germany.
    3. Kim, Seung-Leul & Lee, Sang-Ho, 2016. "The licensing of eco-technology under emission taxation: Fixed fee vs. auction," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 343-357.
    4. Arijit Mukherjee & Yingyi Tsai, 2015. "Does two-part tariff licensing agreement enhance both welfare and profit?," Journal of Economics, Springer, vol. 116(1), pages 63-76, September.

    More about this item

    Keywords

    Licensing; Tax; Knowledge diffusion; L13; L24; L40; H25; D43;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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