Eco-technology licensing by a foreign innovator and privatization policy in a polluting mixed duopoly

Seung-Leul Kim, Sang-Ho Lee and Toshihiro Matsumura

Asia-Pacific Journal of Accounting & Economics, 2018, vol. 25, issue 3-4, 433-448

Abstract: This article investigates the fixed-fee licensing contract in a mixed duopoly where public and private firms may purchase eco-technology from a foreign innovator. We show that the foreign innovator chooses either an exclusive or a non-exclusive licensing contract, depending on (i) the cost gap between the two firms, (ii) the environmental damage caused by pollutants, and (iii) whether a public firm is privatized or not. We further examine the welfare consequences of non-exclusive licensing, exclusive licensing and discriminatory fixed-fee licensing contracts, respectively, and show that privatization improves social welfare when both cost gap and environmental damage are large.

Date: 2018
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Citations: View citations in EconPapers (28)

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DOI: 10.1080/16081625.2017.1339617

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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