Royalties vs. fees: How do firms pay for foreign technology?

Sharmila Vishwasrao

No 4023, Working Papers from Department of Economics, College of Business, Florida Atlantic University

Abstract: The theoretical determinants of technology licensing contracts have been extensively studied but empirical evidence is scarce. We assemble a data set of all the foreign technology licensing agreements entered into by manufacturing firms in India between 1989 and 1993. Industry, firm, and contract characteristics are used to explain differences between the forms of payment in licensing contracts. Our findings support theoretical arguments; licensing contracts are more likely to use royalties when sales are relatively high, while increased volatility of sales and greater profitability favor fixed fee contracts. We also find that firms are more likely to use output based payments to control the sale and diffusion of R&D or brand intensive know-how to unaffiliated firms.

Keywords: Technology transfer; licensing contracts (search for similar items in EconPapers)
JEL-codes: F23 L14 L24 O32 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2004-10, Revised 2006-09
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ino, nep-ipr and nep-pr~
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Forthcoming in International Journal of Industrial Organization

Downloads: (external link)
http://www.sciencedirect.com/science?_ob=ArticleUR ... e30cae4b2cd8fa6#cor1 Revised version, 2006 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8P-4M0J494-1&_user=10&_coverDate=09%2F28%2F2006&_rdoc=1&_fmt=summary&_orig=browse&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=609abcf2b2792e56de30cae4b2cd8fa6#cor1 [301 Moved Permanently]--> https://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8P-4M0J494-1&_user=10&_coverDate=09%2F28%2F2006&_rdoc=1&_fmt=summary&_orig=browse&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=609abcf2b2792e56de30cae4b2cd8fa6)

Related works:
Journal Article: Royalties vs. fees: How do firms pay for foreign technology? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fal:wpaper:04023

Access Statistics for this paper

More papers in Working Papers from Department of Economics, College of Business, Florida Atlantic University Contact information at EDIRC.
Bibliographic data for series maintained by Vadym Volosovych ( this e-mail address is bad, please contact ).