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The “Profitability” of Technology Licensing by U.S. Multinationals: A Framework for Analysis and an Empirical Study

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  • Farok J Contractor

    (The Wharton School)

Abstract

The fees or compensation charged by technology licensing companies to recipient firms overseas have long been subject to debate. Opinion has ranged from a cost-related pricing to a monopolistic pricing model where the price or compensation is considerably higher than the variable costs of effecting a transfer. The empirical study covering 102 technology licenses shows that whereas compensation levels greatly exceed transfer costs, statistically they are strongly related. Compensation levels are influenced by the extent of services rendered to the licensee and by his scale of production. Important differences were manifest between industrialized nations and LDCs, between product types, and between patented and unpatented technologies.© 1980 JIBS. Journal of International Business Studies (1980) 11, 40–62

Suggested Citation

  • Farok J Contractor, 1980. "The “Profitability” of Technology Licensing by U.S. Multinationals: A Framework for Analysis and an Empirical Study," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(2), pages 40-62, June.
    • Handle: RePEc:pal:jintbs:v:11:y:1980:i:2:p:40-62
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    Citations

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    Cited by:

    1. Clegg, Jeremy & Cross, Adam R., 2000. "Affiliate and non-affiliate intellectual property transactions in international business: an empirical overview of the UK and USA," International Business Review, Elsevier, vol. 9(4), pages 407-430, August.
    2. repec:wip:wpaper:3 is not listed on IDEAS
    3. Galai, Dan & Ilan, Yael, 1995. "Economic evaluation of remuneration from patents and technology transfers," International Review of Financial Analysis, Elsevier, vol. 4(2-3), pages 107-121.
    4. Anja Breitwieser & Neil Foster-McGregor, 2012. "Intellectual Property Rights, Innovation and Technology Transfer: A Survey," wiiw Working Papers 88, The Vienna Institute for International Economic Studies, wiiw.
    5. Elif Bascavusoglu & Maria Pluvia Zuniga, 2005. "The effects of intellectual property protection on international knowledge contracting," Cahiers de la Maison des Sciences Economiques bla05009, Université Panthéon-Sorbonne (Paris 1).
    6. Keith Maskus, 1998. "The international regulation of intellectual property," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(2), pages 186-208, June.
    7. Li, Shenxue & Clark, Timothy & Sillince, John, 2018. "Constructing a strategy on the creation of core competencies for African companies," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 204-213.
    8. Suma Athreye & Yong Yang, 2011. "Disembodied Knowledge Flows in the World Economy," WIPO Economic Research Working Papers 03, World Intellectual Property Organization - Economics and Statistics Division, revised Dec 2011.
    9. Wonchan Ra, 2008. "A Framework for the Choice of Compensation Types in Foreign Knowledge Acquisition through Strategic Alliances between Firms," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 11(2), pages 309-331, September.
    10. Mathew Manimala & K. Thomas, 2013. "Learning Needs of Technology Transfer: Coping with Discontinuities and Disruptions," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(4), pages 511-539, December.

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