This paper empirically analyzes the determinants of the choice between wholly owned subsidiary and technology licensing as a strategy for expansion abroad. We use a new and comprehensive database on worldwide plant level investments in the chemical industry during the 1981-1991 period. We find...

In technology-based industries, many incumbent firms license their technology to other firms that will potentially compete with them. Such a strategy is difficult to explain within traditional models of licensing. This paper extends the literature on licensing by relaxing the widespread...

The licensing of technology entails a tradeoff: Licensing payments net of transaction costs (revenue effect) must be balanced against the lower price-cost margin and/or reduced market share implied by increased competition (profit dissipation effect) from the licensee. We argue that the presence...

Over the last decade, companies have paid greater attention to the management of their intellectual assets. We build a model that helps understand how licensing activity should be organized within large corporations. More specifically, we compare decentralization--where the business unit using...

We investigate whether patents that are jointly held by legally independent companies help sustain product-market collusion. We use a simple model of repeated interactions to show that joint patents can serve collusive purposes. Our model generates two testable predictions: when joint patents...