Licensing and the Incentive for Innovation
Previous literature has mostly considered R&D and licensing activities separately. In this paper we examine the effect of licensing on R&D and social welfare. We show that the effect of licensing on the incentive for doing R&D is ambiguous and depends on the costs of doing R&D. We also show that the possibility of licensing can change the identity of the innovating firm. However, we find that social welfare is non- decreasing in presence of licensing.
|Date of creation:||05 Nov 2002|
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|Note:||Type of Document - pdf; prepared on pc; pages: 23|
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