Licensing a Vertical Product Innovation*

Li, Changying; Wang, Junmei

doi:10.1111/j.1475-4932.2010.00630.x

Cited by 51 publications

(34 citation statements)

References 24 publications

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“…This result is different from that in Li and Wang () in which international technology is welfare‐enhancing. In their model, both domestic firms produce a homogeneous product whereas we assume that the two firms produce vertically differentiated products.…”

Section: Technology Licensing Under Cournot Competitioncontrasting

confidence: 99%

“…Assuming that the firms produce an identical product, they find that the outsider patentee will carry out non‐exclusive licensing if the innovation is small. This result is also parallel to Li and Wang (). By assuming the initial quality gap is zero, they show that non‐exclusive licensing is the optimal strategy for the patentee.…”

Section: Technology Licensing Under Cournot Competitionsupporting

confidence: 85%

“…(). Li and Wang () assume that two domestic firms produce an identical product before licensing and the outsider patentee locates in the domestic country, whereas we assume that the two domestic firms initially produce vertically differentiated products with a foreign patentee. Nguyen et al.…”

Section: Introductionmentioning

confidence: 99%

“… This kind of set‐up can be found in Li and Wang (). To gain more insight of our analysis, we assume that s and λ ∈ (0, 1).…”

mentioning

confidence: 99%

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International Technology Transfer and Welfare

Kuo

Lin

Peng

2016

Review Development Economics

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We investigate the welfare effect of international technology transfer in a quality model. A foreign innovator with a new quality product can license its innovation to the domestic firm(s) via a fixed fee. Findings show that the foreign innovator will license exclusively to the high‐quality firm under Bertrand competition, whereas it may exclusively license to the high‐quality firm, the low‐quality firm, or non‐exclusively to both firms under Cournot competition. Non‐exclusive licensing is necessarily welfare‐enhancing whereas exclusive licensing is welfare‐reducing if the quality of the new technology is not sufficiently superior to that of the domestic ones.

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Section: Technology Licensing Under Cournot Competitioncontrasting

confidence: 99%

Section: Technology Licensing Under Cournot Competitionsupporting

confidence: 85%

Section: Introductionmentioning

confidence: 99%

“… This kind of set‐up can be found in Li and Wang (). To gain more insight of our analysis, we assume that s and λ ∈ (0, 1).…”

mentioning

confidence: 99%

See 2 more Smart Citations

International Technology Transfer and Welfare

Kuo

Lin

Peng

2016

Review Development Economics

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“…3. Another exception is Li and Wang (2010) who examine how an outside patent holder licenses its vertical product innovation to two Cournot competitors. 4.…”

mentioning

confidence: 98%

Cost asymmetry and vertical product licensing

Chang

Peng

2013

Asia-Pacific Journal of Accounting & Economics

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This paper investigates the optimal licensing contract for a product innovation in a vertically differentiated duopoly. The two firms have different marginal costs and the high-quality firm can license its technology on product quality to the low-quality firm. It is found that the optimal form of licensing contract depends on the relative marginal costs of the two firms. If the marginal cost of the high-quality firm is relatively high (low), fixed-fee licensing is superior (inferior) to royalty licensing from the viewpoint of the licensor. Surprisingly, consumers are worse off if the quality difference between the two firms is small. This result is in contrast to the received wisdom in the product licensing literature.

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Absorptive capacity, product heterogeneity and technology licensing under different fee scenarios

Wenqing,

Jie

2024

Manage Decis Econ

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Since a licensee does not always fully absorb technology in the process of technology licensing, based on the consideration of incomplete absorption, this paper establishes a game model consisting of a technology research and development firm and two licensee firms, to explore the most licensing strategies of the licensing firms as well as the optimal social welfare of the licensee under different fee scenarios. The results of the study show that (1) under the flat fee scenario, technology R&D enterprises will choose royalty licensing in most cases, but when the gap in the absorptive capacity of the licensed enterprise is small and the difference in the quality of the products between the two licensing parties is large, fixed‐fee licensing is a more preferable option;(2)in the differential fee scenario, technology R&D firms prefer differential fixed fee licenses;(3)when technological empowerment occurs, local social welfare is enhanced;(4)technology development firms prefer firms with high absorptive capacity, but also charge higher fees;(5)differential fees charged by technology R&D firms to authorized firms do not always lead to a relative decline in local social welfare; they can lead to a greater enhancement of social welfare within a certain interval, and the enhancement is even greater than the enhancement of social welfare brought about by uniform fees.

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Licensing a Vertical Product Innovation*

Cited by 51 publications

References 24 publications

International Technology Transfer and Welfare

International Technology Transfer and Welfare

Cost asymmetry and vertical product licensing

Absorptive capacity, product heterogeneity and technology licensing under different fee scenarios

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