Technology Licensing with Asymmetric Absorptive Capacity

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Title:	Technology Licensing with Asymmetric Absorptive Capacity
Authors:	Chih-Wei Chang;Yan-Shu Lin;Ming-Fang Tsai
Keywords:	Fixed fee;royalty;asymmetric absorptive capacity;welfare-reducing licensing
Date:	2016-06-08
Issue Date:	2016-08-15
Publisher:	Routledge
Abstract:	This paper establishes a duopoly model to investigate the impacts of asymmetric absorptive capacity and asymmetric production cost on international technology licensing by an outside patent-holder. We find that, irrespective of fixed fee and royalty licensing, the patent-holder may adopt exclusively licensing if the difference in the absorptive capacity of two firms is large enough; otherwise, it will license to both firms. Surprisingly, such international licensing may be welfare-reducing if the difference in absorptive capacities between two licensees is large enough.
Relation:	Asia-Pacific Journal of Accounting & Economics 23(3), pp.278-290
DOI:	10.1080/16081625.2016.1188452
Appears in Collections:	[Graduate Institute & Department of Industrial Economics] Journal Article

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