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

Author

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  • Carsten Burhop

    () (Max Planck Institute for Research on Collective Goods, Bonn and University of Cologne)

  • Thorsten Lübbers

    () (Max Planck Institute for Research on Collective Goods, Bonn and University of Cologne)

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 Lübbers, 2011. "The design of licensing contracts: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_18, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2011_18
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    More about this item

    Keywords

    Economic History; Germany; pre-1913; Licensing contracts; Technology transfer;

    JEL classification:

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

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