The Impact of Technology Licensing Payment Mechanisms on Firms' Innovative Performance
Although numerous papers have examined the ways in which firms can improve their innovative performance through technology alliances, empirical research on the effect of contract structures in technology licensing has been scarce. This study provides evidence that the payment mechanisms agreed upon in licensing contracts affect the licensee firms¡¯ innovative performance. Based on a dataset of technology licensing contracts concluded by small- and medium-sized enterprises around the world, this paper analyzes the influence of fixed-fee payments and ongoing payments?including royalty, milestone, and equity payments?on firm performance. The findings reveal that ongoing payments are more likely to positively influence the innovative performance of licensee firms. The results also suggest that equity grants to the licensor would not impact the licensee¡¯s performance as much as fixed-fee payments. These outcomes provide crucial insights into the ways in which small high-tech firms can utilize their external technology resources.
|Date of creation:||Dec 2010|
|Date of revision:||Dec 2010|
|Publication status:||Published later version in the journal of innovation studies of Korea Society of Innovation|
|Contact details of provider:|| Postal: 599 Gwanak-Ro, Gwanak-Gu, Seoul 151-744|
Web page: http://temep.snu.ac.kr/
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.:
- Roberto G. Gutierrez & Shana Carter & David M. Drukker, 2001. "On boundary-value likelihood-ratio tests," Stata Technical Bulletin, StataCorp LP, vol. 10(60).
- 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.
- 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.
- Vishwasrao, Sharmila, 2007. "Royalties vs. fees: How do firms pay for foreign technology?," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 741-759, August.
- Sharmila Vishwasrao, 2004. "Royalties vs. fees: How do firms pay for foreign technology?," Working Papers 04023, Department of Economics, College of Business, Florida Atlantic University, revised Sep 2006.
- Lee, Yikuan & Cavusgil, S. Tamer, 2006. "Enhancing alliance performance: The effects of contractual-based versus relational-based governance," Journal of Business Research, Elsevier, vol. 59(8), pages 896-905, August.
- Kim, YoungJun & Vonortas, Nicholas S., 2006. "Technology licensing partners," Journal of Economics and Business, Elsevier, vol. 58(4), pages 273-289.
- Arora, Ashish, 1996. "Contracting for tacit knowledge: the provision of technical services in technology licensing contracts," Journal of Development Economics, Elsevier, vol. 50(2), pages 233-256, August.
- Bousquet, Alain & Cremer, Helmuth & Ivaldi, Marc & Wolkowicz, Michel, 1998. "Risk sharing in licensing," International Journal of Industrial Organization, Elsevier, vol. 16(5), pages 535-554, September.
- Macho-Stadler, Ines & Martinez-Giralt, Xavier & David Perez-Castrillo, J., 1996. "The role of information in licensing contract design," Research Policy, Elsevier, vol. 25(1), pages 43-57, January.
- Macho, I. & Martinez-Giralt, X. & Perez-Castrillo, D., 1993. "The Role of Information in Licensing Contract Design," UFAE and IAE Working Papers 216.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Pisano, Gary P, 1989. "Using Equity Participation to Support Exchange: Evidence from the Biotechnology Industry," Journal of Law, Economics and Organization, Oxford University Press, vol. 5(1), pages 109-126, Spring.
- Sugata Marjit & Arijit Mukherjee, 2001. "Technology Transfer under Asymmetric Information: The Role of Equity Participation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(2), pages 282-282, June.
- 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.
- Bozeman, Barry, 2000. "Technology transfer and public policy: a review of research and theory," Research Policy, Elsevier, vol. 29(4-5), pages 627-655, April.
- Maryann Feldman & Irwin Feller & Janet Bercovitz & Richard Burton, 2002. "Equity and the Technology Transfer Strategies of American Research Universities," Management Science, INFORMS, vol. 48(1), pages 105-121, January.
- Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics and Organization, Oxford University Press, vol. 13(2), pages 387-409, October.
- Thomas Hatzichronoglou, 1997. "Revision of the High-Technology Sector and Product Classification," OECD Science, Technology and Industry Working Papers 1997/2, OECD Publishing.
- Bessy, Christian & Brousseau, Eric, 1998. "Technology licensing contracts features and diversity1," International Review of Law and Economics, Elsevier, vol. 18(4), pages 451-489, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:snv:dp2009:201071. 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: (Jorn Altmann)
If references are entirely missing, you can add them using this form.