Domestic patenting systems and foreign licensing choices

Yingyi Tsai () and Arijit Mukherjee
Additional contact information
Yingyi Tsai: National University of Kaohsiung

Journal of Economics, 2017, vol. 121, issue 2, No 4, 173-191

Abstract: Abstract This paper examines a foreign technology holder’s licensing choices between royalty and fixed-fee scheme. We emphasize that foreign licensor chooses the quality of licensed technology when the licensee country does not implement perfect intellectual property protection for licensor’s technology. We study quality choice as the foreign licensor’s selection for a particular grade of technical skills. We show that fixed fee emerges as the equilibrium licensing scheme when both the transfer of his technology is relatively efficient and the licensee is sufficiently cost competitive in the domestic market, and that royalty licensing prevails otherwise. We further show it need not hold the general belief that welfare in the licensor country unambiguously rise with a stronger patenting system in the licensee country when, in particular, such patenting system in place is sufficiently lax.

Keywords: Intellectual property protection; Licensing; Quality of the licensed technology; Welfare (search for similar items in EconPapers)
JEL-codes: D43 H25 L13 L24 L40 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00712-017-0523-y Abstract (text/html)

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:kap:jeczfn:v:121:y:2017:i:2:d:10.1007_s00712-017-0523-y

DOI: 10.1007/s00712-017-0523-y

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().