Market Size Difference between Home Country and Foreign Country and Shrinkage on the Optimal Licensing Mode

Ming-Chung Chang ()

Economics Bulletin, 2008, vol. 28, issue 9, A0

Abstract: According to the survey of Current Business (Sauers and Argersinger, 2006), the licensing revenue of the United States from abroad has significantly increased from 1975 to 2005 year, showing that international technology licensing is a very important business action. However, the literature seldom discusses the licensing issue under an open economy. This paper's model setting is different with the model settings in a few earlier papers under an open economy. Some conclusions are found herein. If the per unit production cost and the per unit royalty rate are significantly small, then licensing will not occur. However, when the home country market size increases, the no licensing zone also increases given the foreign country market size. More specifically, if the total market size is significant, then the optimal licensing mode may shrink to a two-part fee only.

JEL-codes: C7 L1 (search for similar items in EconPapers)
Date: 2008-05-15
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2008/Volume28/EB-08AA0015A.pdf (application/pdf)

Related works:
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:ebl:ecbull:eb-08aa0015

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().