On patent licensing in spatial competition with endogenous location choice

Toshihiro Matsumura and Noriaki Matsushima

No 2007-35, Discussion Papers from Kobe University, Graduate School of Business Administration

Abstract: Using a standard linear city model with two firms, we consider how their licensing activities following their R&D investments affect the locations of the firms and the effort levels of the R&D investments. Although recent studies show that R&D investments that may cause a large cost differential between firms yield agglomeration of the firms, we show that licensing activities after R&D investments always lead to the maximum differentiation between the firms and mitigate the price competition. We also show that those licensing activities induce the socially optimal effort levels of R&D activities.

Keywords: licensing; oligopoly; R&D; location (search for similar items in EconPapers)
JEL-codes: L13 O32 R32 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2007-07
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Citations: View citations in EconPapers (4)

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