IP-for-IP or Cash-for-IP? R&D Competition and the Market for Technology
Patrick Herbst () and
Eric Jahn ()
Additional contact information
Patrick Herbst: University of Stirling
Eric Jahn: University of Cooperative Education Dresden
Review of Industrial Organization, 2017, vol. 51, issue 1, No 4, 75-101
Abstract We analyze how firms might benefit from trading restrictions in the market for technology. We show that restricting trade to reciprocal exchange (“IP-for-IP” barter instead of cash transactions), as in cross-licensing agreements, alters the allocation of R&D resources and reduces overinvestment in R&D. The tighter are the trading restrictions, the higher are the costs that are due to forgone gains from trade. Our analysis of the trade-offs involved shows that firms benefit from IP-for-IP restrictions, compared to both free trade and no trade environments, in industries where: (1) firms differ in their capabilities to commercialize IP; and (2) patent complementarities exist.
Keywords: Intellectual property; R&D competition; IP-for-IP; Cross-licensing; Technology trade (search for similar items in EconPapers)
JEL-codes: O32 O31 L11 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s11151-016-9542-z Abstract (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:revind:v:51:y:2017:i:1:d:10.1007_s11151-016-9542-z
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2
Access Statistics for this article
Review of Industrial Organization is currently edited by L.J. White
More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().