Harnessing Success: Determinants of UniversityTechnology Licensing Performance

We study the impact of incentive pay, local development objectives and governmentconstraints on university licensing performance. We develop and test a simple contractingmodel of technology licensing offices, using new survey information together with paneldata on U.S. universities for 1995-99. We find that private universities are much morelikely to adopt incentive pay than public ones, but ownership does not affect licensingperformance conditional on the use of incentive pay. Adopting incentive pay is associatedwith about 30-40 percent more income per license. Universities with strong localdevelopment objectives generate about 30 percent less income per license, but are morelikely to license to local (in-state) startup companies. Stronger government constraints are'costly' in terms of foregone license income and startup activity. These results are robustto controls for observed and unobserved heterogeneity.Keywords: incentives,