Title

License to be more innovative

Document Type

Journal article

Source Publication

Review of Industrial Organization

Publication Date

4-1-1997

Volume

12

Issue

2

First Page

271

Last Page

278

Publisher

Kluwer Academic Publishers

Keywords

Licensing, R&D race

Abstract

A patent holder may choose to give up its current leading position through patent licensing in order to increase its incentive to innovate further and thus avoid falling behind its rivals in future R&D races. We show that because of this “catching-up” effect, licensing may occur even when it reduces current industry profits. The overall effect of licensing is to slow down the pace of innovation, as it reduces the licensee's incentive to conduct R&D.

DOI

10.1023/A:1007710417985

Print ISSN

0889938X

E-ISSN

15737160

Publisher Statement

Copyright © 1997 Kluwer Academic Publishers.

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Lin, P. (1997). License to be more innovative. Review of Industrial Organization, 12(2), 271-278. doi: 10.1023/A:1007710417985

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