Licensing and the Incentive for Innovation

Arijit Mukherjee and Soma Mukherjee
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Soma Mukherjee: Keele University

Industrial Organization from EconWPA

Abstract: 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.

Keywords: Licensing; R&D; Welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2002-11-05
Note: Type of Document - pdf; prepared on pc; pages: 23
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http://129.3.20.41/eps/io/papers/0211/0211008.pdf (application/pdf)

Related works:
Working Paper: Licensing and the Incentive for Innovation (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0211008

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