Get Pennies from Many or Get a Dollar from One? Multiple Licensing in Markets for
Jianwei Dang, Kazuyuki Motohashi, Dong Huo
This paper extends the licensing decision model in prior studies and proposes a two-stage model that explains the effects of product market competition and patent protection on number of licenses made between technology suppliers and buyers. Using novel survey data on Japanese firms’ licensing activities in 2001, our empirical investigation finds that more competitors in licensors’ product markets lead to more licenses whereas more competitors in licensees’ product markets lead to fewer licenses. Further, empirical results also show that patent protection elicits opposite effects in the two stages such that patented technologies are more likely to be licensed but to fewer licensees, compared with non-patented technologies. Finally, the effects of product market competition and patent appear to interact in their joint influence on number of licenses.
Multiple licensing, Market for technology, Competition, Patent