Determinants of technology licensing: the case of licensors

This paper empirically analyzes the behavior of technology licensors using a large dataset of US-traded companies. The stock of technological knowledge of the licensor, this company's prior exposure to licensing, the rate of growth of its primary sector, the strength of IPR protection, and the nature of the technology are found to be important determinants of the propensity to sell technology through nonexclusive licenses. Smaller firms in industries with 'simpler' technologies tend to sell technology through exclusive licenses more than others. In contrast, larger firms in industries dealing with more 'complex' technologies engage relatively more in cross licensing. Copyright © 2006 John Wiley & Sons, Ltd.