Optimal licensing contract in an open economy

Arijit Mukherjee

Economics Bulletin, 2007, vol. 12, issue 3, 1-6

Abstract: Empirical evidences show that technology licensing contracts differ significantly and may consist of only up-front fixed-fee, only output royalty or the combinations of fixed-fee and output royalty. We explain these possibilities under international technology transfer. The trade-off between the incentive for saving the transportation cost of exporting and the incentive for reducing competition after licensing is responsible for the results. Our explanation differs from the existing studies where imitation and product differentiation are responsible for different licensing contracts.

JEL-codes: F1 L1 (search for similar items in EconPapers)
Date: 2007-02-25
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Citations: View citations in EconPapers (22)

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