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An innovation adoption model of licensing-in for US start-ups

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  • Bernadette Power
  • Gavin C. Reid

Abstract

Using the Kauffman panel dataset of US start-ups, we analyse the key determinants of licensing-in adoption. Licensing-in entails an intellectual property contract between the licensor (e.g. upstream established firm) and licensee (e.g. downstream start-up) aiming to bring an innovation to market rapidly. Assuming maximizing of the owner’s managerial utility in the start-up years, we explain licensing-in adoption through firm characteristics like size, R & D and capital structure, as well as other IP types, and controls for year and regional fixed effects, using panel probit estimation with adjustments for sample selection bias and endogeneity. We find key determinants of licensing-in to be owners’ equity, product (rather than service) sales and R & D spend; and then comment on their policy implications for business incubation.

Suggested Citation

  • Bernadette Power & Gavin C. Reid, 2021. "An innovation adoption model of licensing-in for US start-ups," Economics and Business Letters, Oviedo University Press, vol. 10(4), pages 369-382.
    • Handle: RePEc:ove:journl:aid:15939
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/15939
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    1. André Spithoven & Wim Vanhaverbeke & Nadine Roijakkers, 2013. "Open innovation practices in SMEs and large enterprises," Small Business Economics, Springer, vol. 41(3), pages 537-562, October.
    2. Keld Laursen & Maria Isabella Leone & Salvatore Torrisi, 2010. "Technological exploration through licensing: new insights from the licensee's point of view," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(3), pages 871-897, June.
    3. Gabriele Santoro & Alberto Ferraris & Elisa Giacosa & Guido Giovando, 2018. "How SMEs Engage in Open Innovation: a Survey," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(2), pages 561-574, June.
    4. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
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