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J Technol Transf (2013) 38:251272
DOI 10.1007/s10961-012-9252-0
Seongkyoon Jeong Sungki Lee Yeonbae Kim
Published online: 22 March 2012 Springer Science+Business Media, LLC 2012
Abstract This paper examines the determinants of the types of technology transactions in the markets for technology. On the basis of the relationship between the characteristics of a rms patents and the rms decision on whether to license out or sell these patented technologies, we empirically analyze the determinants of the decision. We employ inter-locked patent data from the representative Korean market for technology, the National Technology Bank, using a bivariate probit regression model in a theoretical framework that includes the option and transaction cost perspectives. Overall, the results show that the relationship between licensing and selling, the major alternatives in technology transactions, is strongly substitutive. The major nding of this study is that rms in markets for technology tend to prefer licensing their patents when uncertainty is low or transaction cost is high, whereas they tend to prefer selling their patents under opposite conditions.
Keywords Technology transfer Market for technology Technology exploitation
strategy Technology licensing
JEL Classication C35 D22 D81
S. Jeong
Department of R&D Policy, Korea Institute of Machinery & Materials, 104 Sinseong-Ro, Yuseong-Gu, Daejeon 305-343, Republic of Korea
S. Lee (&)
IP Policy Team, Korea Institute of Intellectual Property,647-9 Yeoksam-Dong, Gangnam-Gu, Seoul 135-980, Republic of Korea e-mail: sklee@kiip.re.kr
Y. Kim
Technology Management, Economics and Policy Program (TEMEP), College of Engineering, Seoul National University, San 56-1, Shillim-Dong, Kwanak-Gu, Seoul 151-744, Republic of Korea
Licensing versus selling in transactions for exploiting patented technological knowledge assets in the markets for technology
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1 Introduction
In the past, most industrial rms used their technologies in their own products or services in order to achieve a competitive advantage in their businesses (Elton et al. 2002; Chesbrough 2003). External exploitation of technology, however, has become a growing phenomenon in practice (Lichtenthaler 2008), and technological innovation through transactions of intellectual property has increased substantially (Arora et al. 2001). This phenomenon has resulted in the emergence of the open innovation paradigm (Chesbrough 2003), which emphasizes the strategic management of technological assets. Therefore, many rms maximize the value of their knowledge assets through transactions such as licensing out and selling their technologies.1
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