Licensing and the Incentive for Innovation

Arijit Mukherjee and Soma Mukherjee
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Soma Mukherjee: Department of Economics, Keele University, Keele,, Postal: Staffordshire, ST5 5BG, U.K

No KERP 2002/17, Keele Economics Research Papers from Centre for Economic Research, Keele University

Abstract: Previous literature has mostly considered R&D and licensing activities separately. In this paper we examine the effect of licensing on R&D and social welfare.We show that the effect of licensing on the incentive for doing R&D is ambiguous and depends on the costs of doing R&D. We also show that the possibility of licensing can change the identity of the innovating firm. However, we find that social welfare is nondecreasing in presence of licensing.

Keywords: Licensing; R&D; Welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 O34 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2002-10
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Working Paper: Licensing and the Incentive for Innovation (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:kee:kerpuk:2002/17

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