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Technology licensing with asymmetric absorptive capacity

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  • Chih-Wei Chang
  • Yan-Shu Lin
  • Ming-Fang Tsai

Abstract

This paper establishes a duopoly model to investigate the impacts of asymmetric absorptive capacity and asymmetric production cost on international technology licensing by an outside patent-holder. We find that, irrespective of fixed fee and royalty licensing, the patent-holder may adopt exclusively licensing if the difference in the absorptive capacity of two firms is large enough; otherwise, it will license to both firms. Surprisingly, such international licensing may be welfare-reducing if the difference in absorptive capacities between two licensees is large enough.

Suggested Citation

  • Chih-Wei Chang & Yan-Shu Lin & Ming-Fang Tsai, 2016. "Technology licensing with asymmetric absorptive capacity," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 278-290, July.
    • Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:278-290
    DOI: 10.1080/16081625.2016.1188452
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    Cited by:

    1. Xu, Lili & Lee, Sang-Ho, 2020. "Strategic Relations between Corporate Social Responsibility and Partial Privatization Policy with Foreign Penetration," MPRA Paper 100770, University Library of Munich, Germany.
    2. Dan Sasaki, 2016. "Infinite horizon oligopoly with asynchronous moves: Cournot-Bertrand reversal," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 327-341, July.
    3. Banerjee, Swapnendu & Poddar, Sougata, 2019. "‘To sell or not to sell’: Licensing versus selling by an outside innovator," Economic Modelling, Elsevier, vol. 76(C), pages 293-304.
    4. Holland, Heinrich & Zand-Niapour, Sam, 2017. "Einflussfaktoren der Adoption von "Connected Cars" durch Endnutzer in Deutschland: Eine empirische Untersuchung," UASM Discussion Paper Series 5/2017, University of Applied Sciences Mainz.
    5. Lu, Yuanzhu & Poddar, Sougata, 2023. "Exclusive and non-exclusive licensing with shelving," Mathematical Social Sciences, Elsevier, vol. 126(C), pages 13-29.
    6. Xu, Lili & Lee, Sang-Ho & Matsumura, Toshihiro, 2017. "Ex-ante versus ex-post privatization policies with foreign penetration in free-entry mixed markets," International Review of Economics & Finance, Elsevier, vol. 50(C), pages 1-7.
    7. Lili Xu & Fanrui Su & Sang-Ho Lee, 2023. "Strategic corporate social responsibility and partial privatization policy with foreign penetration," The Japanese Economic Review, Springer, vol. 74(2), pages 251-278, April.

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