Strategic timing of academic commercialism: evidence from technology transfer

Abstract

While the markets for technology have received considerable attention because of the contribution to management and economy, universities and government research institutes have risen as important providers of technology. Their early licensing agreements may contribute to enhancing the licensor's productivity, the licensee's competency, and the efficiency of national innovation system. However, later licensing agreements enhance the licensor's bargaining power. Thus, the timing of licensing is not only a policy consideration at the national level but also a key strategic consideration at the R&D entity level. We first theoretically claim that the ability to ''invent around'' determines the impact of uncertainty attenuation on the timing of licensing on the condition of market friction. Based on this claim, the paper argues that technology transfers from public research organizations differ from inter-firm licensing transactions in regard to their timing patterns. Using the data of commercialization activity through national R&D programs in South Korea, we empirically find that resolving uncertainties rather delays the licensing time for technology transfers, as opposed to inter-firm transactions. In addition, our findings provide evidence of frictions related to search costs associated with the unique nature of R&D processes in public research organizations.

Waiting for the Payday? The Market for Startups and the Timing of Entrepreneurial Exit

“…If we compare different types of innovation, we find that the relationship between the degree of radicalness (which we model as startups with higher idiosyncratic uncertainty about their market value) and the timing of startup sale is more complex than the literature would suggest. Greater uncertainty, which is typically associated with more radical innovation, complicates negotiation over the terms of the deal (Jeong and Lee, 2015), increases the risk of misappropriation (Luo, 2014) and biases valuation of the invention (Allain et al, 2016). Thus, deals may be delayed to allow for the resolution of uncertainty.…”

“…To preview our most interesting finding (see below), consider that the conventional wisdom among innovation scholars is that more radical inventions are sold later. Greater uncertainty which typically is associated to more radical inventions, complicates the negotiations around the terms of the deal (Jeong and Lee, 2015), and increases the risk of misappropriation (Luo, 2014) and the chances of biases in assessments of the value of the invention (Allain et al, 2016). As a result, both sellers and buyers might find it profitable to wait for additional information.…”

What Causes Technology Commercialization to Succeed or Fail after Transfer from Public Research Organizations

“…First, the technology commercialization activities originating from PROs differ from inter-firm licensing transactions (Jeong and Lee, 2015;Park et al, 2010). According to a study by Cohen and his colleagues (2002), firms are more likely to select PROs as a knowledge source for commercialization completion.…”

“…In this study, we concentrate on whether the firm had launched its product or service into the market. We opted to examine the issue from a more market-oriented perspective than the market-share perspective of the past because the market for technology is known to be imperfect (Thursby and Kemp, 2002;Jeong and Lee, 2015). In other words, if the firm launched its product or service through the implementation of the transferred technology, we considered that to be a successful commercialization.…”