Appropriability and Commercialization: Evidence from MIT Inventions
At least since Arrow (1962), the effects of appropriability on invention have been well studied, but there has been little analysis of the effect of appropriability on the commercialization of existing inventions. Exploiting a database of 805 attempts by private firms to commercialize inventions licensed from MIT between 1980 and 1996, we explore the influence of several appropriability mechanisms on the commercialization and termination of projects to develop products based on university inventions. We construct a theoretical model in which the licensee faces technical and market uncertainty, and anticipates that its products will be imitated. We characterize the hazards of commercialization and termination as functions of appropriability mechanisms, including patent scope and the effectiveness of patents as well as learning, lead time, and secrecy in attaining competitive advantage. The model is tested using a competing risks framework that allows for non-parametric unobserved heterogeneity and correlated risks. In our sample, patent strength and secrecy influence termination decisions, while learning, patent scope and lead time influence commercialization decisions.
|Date of creation:||Jun 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (650) 725-1874
Fax: (650) 723-8611
Web page: http://siepr.stanford.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jerry G. Thursby & Marie C. Thursby, 2000.
"Who is Selling the Ivory Tower? Sources of Growth in University Licensing,"
NBER Working Papers
7718, National Bureau of Economic Research, Inc.
- Jerry G. Thursby & Marie C. Thursby, 2002. "Who Is Selling the Ivory Tower? Sources of Growth in University Licensing," Management Science, INFORMS, vol. 48(1), pages 90-104, January.
- Jensen, Richard, 1982. "Adoption and diffusion of an innovation of uncertain profitability," Journal of Economic Theory, Elsevier, vol. 27(1), pages 182-193, June.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- Nancy T. Gallini, 2002. "The Economics of Patents: Lessons from Recent U.S. Patent Reform," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 131-154, Spring.
- Marie Thursby & Jerry Thursby & Emmanuel Dechenaux, 2005.
"Shirking, Sharing Risk, and Shelving: The Role of University License Contracts,"
NBER Working Papers
11128, National Bureau of Economic Research, Inc.
- Dechenaux, Emmanuel & Thursby, Marie & Thursby, Jerry, 2009. "Shirking, sharing risk and shelving: The role of university license contracts," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 80-91, January.
- Reinganum, Jennifer F, 1981.
"On the Diffusion of New Technology: A Game Theoretic Approach,"
Review of Economic Studies,
Wiley Blackwell, vol. 48(3), pages 395-405, July.
- Reinganum, Jennifer F., . "On the Diffusion of New Technology: A Game Theoretic Approach," Working Papers 312, California Institute of Technology, Division of the Humanities and Social Sciences.
- Marie Thursby & Richard Jensen, 2001. "Proofs and Prototypes for Sale: The Licensing of University Inventions," American Economic Review, American Economic Association, vol. 91(1), pages 240-259, March.
- Richard Jensen, 2003. "Innovative leadership: First-mover advantages in new product adoption," Economic Theory, Springer, vol. 21(1), pages 97-116, 01.
- Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001.
"The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools,"
NBER Working Papers
8498, National Bureau of Economic Research, Inc.
- Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
- Hall, Bronwyn H & Jaffe, Adam B & Trajtenberg, Manuel, 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," CEPR Discussion Papers 3094, C.E.P.R. Discussion Papers.
- Waterson, Michael, 1990. "The Economics of Product Patents," American Economic Review, American Economic Association, vol. 80(4), pages 860-69, September.
- Thursby, Jerry G & Jensen, Richard & Thursby, Marie C, 2001. " Objectives, Characteristics and Outcomes of University Licensing: A Survey of Major U.S. Universities," The Journal of Technology Transfer, Springer, vol. 26(1-2), pages 59-72, January.
- Goel, Rajeev K, 1996. "Uncertainty, Patent Length and Firm R&D," Australian Economic Papers, Wiley Blackwell, vol. 35(66), pages 74-80, June.
- Takalo, Tuomas & Kanniainen, Vesa, 2000. "Do patents slow down technological progress?: Real options in research, patenting, and market introduction," International Journal of Industrial Organization, Elsevier, vol. 18(7), pages 1105-1127, October.
- Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December.
- Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
- Kamien, Morton I & Schwartz, Nancy L, 1972. "Timing of Innovations Under Rivalry," Econometrica, Econometric Society, vol. 40(1), pages 43-60, January.
- Marco, Alan C., 2005.
"The option value of patent litigation: Theory and evidence,"
Review of Financial Economics,
Elsevier, vol. 14(3-4), pages 323-351.
- Marco, Alan, 2001. "The Option Value of Patent Litigation: Theory and Evidence," Vassar College Department of Economics Working Paper Series 52, Vassar College Department of Economics, revised Dec 2003.
- Santoro, Michael D. & Chakrabarti, Alok K., 2002. "Firm size and technology centrality in industry-university interactions," Research Policy, Elsevier, vol. 31(7), pages 1163-1180, September.
- Benoit, Jean-Pierre, 1985. "Innovation and Imitation in a Duopoly," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 99-106, January.
- Han, Aaron & Hausman, Jerry A, 1990. "Flexible Parametric Estimation of Duration and Competing Risk Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(1), pages 1-28, January-M.
- Roberts, Kevin & Weitzman, Martin L, 1981.
"Funding Criteria for Research, Development, and Exploration Projects,"
Econometric Society, vol. 49(5), pages 1261-88, September.
- M. L. Weitzman & K. Roberts, 1979. "Funding Criteria for Research, Development and Exploration Projects," Working papers 234, Massachusetts Institute of Technology (MIT), Department of Economics.
- McCall, Brian P, 1996.
"Unemployment Insurance Rules, Joblessness, and Part-Time Work,"
Econometric Society, vol. 64(3), pages 647-82, May.
- McCall, B.P., 1993. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Papers 93-07, Minnesota - Industrial Relations Center.
- Hoppe, Heidrun C. & Lehmann-Grube, Ulrich, 2005. "Innovation timing games: a general framework with applications," Journal of Economic Theory, Elsevier, vol. 121(1), pages 30-50, March.
- Goldfarb, Brent & Henrekson, Magnus, 2003. "Bottom-up versus top-down policies towards the commercialization of university intellectual property," Research Policy, Elsevier, vol. 32(4), pages 639-658, April.
- Gary L. Lilien & Eunsang Yoon, 1990. "The Timing of Competitive Market Entry: An Exploratory Study of New Industrial Products," Management Science, INFORMS, vol. 36(5), pages 568-585, May.
When requesting a correction, please mention this item's handle: RePEc:sip:dpaper:05-017. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Shor)
If references are entirely missing, you can add them using this form.