a dynamic analysis of licensing the boomerang effect and grant back clauses this article develops an incomplete contract model of the licensing relationship to analyze the dynamic effects of licensing on r d competition in the innovation market and to examine the rationale for often observed grant back clauses of particular concern are how the consideration of future competition distorts the licensing relationship and how the grant back clause can mitigate this distortion i also evaluate the validity of the casual antitrust argument that grant back clauses may adversely affect competition because they reduce the licensee s incentive to engage in r d and thereby limit rivalry in innovation markets

bank lending channel in a dual banking system why are islamic banks so responsive we examine the interest rate sensitivity of both deposits and credits at islamic and conventional banks in turkey we find that the bank lending channel is especially operative for islamic banks impulse responses for conventional and islamic banks reveal that islamic bank depositors sensitivity to policy rate changes is substantially larger than that of conventional bank depositors next to heavily dependence on deposit funding we consider that inertia in islamic bank deposit rates impedes these banks to keep those depositors who consider the opportunity cost of monetary policy rates is unbearable on the lending side we obtain similar results implying that tight monetary policy leads to a larger contraction in islamic bank credits this finding is a reflection of the favourable attitude of islamic banks towards small and medium sized enterprise sme financing when similar relationships are analysed for currency and inflation shocks we again find larger responses for islamic banks showing the cyclical nature of sme credits

the role of brand image and product characteristics on firms entry and oem decisions we investigate the optimal market entry and original equipment manufacturer oem decisions of a firm facing a market in which firms brands can be horizontally differentiated and products can be vertically differentiated the entrant might sell under its own brand and compete with an incumbent become a supplier to the incumbent or both findings reveal that when consumers perceive the firms are horizontally and vertically differentiated the entrant profits by simultaneously entering the market and establishing an oem arrangement with the incumbent in such competitive scenarios both buyer and seller increase profits by agreeing on wholesale prices that are not too low which softens both horizontal and vertical conflict between the firms findings also show that the incumbent may prefer to pay high wholesale prices to the entrant even if the incumbent had the option to source the product independently at a lower marginal cost when firms have the capability of producing each other s product lines su

the structure of licensing contracts industrial organization theory has explored several issues related to licensing but empirical analyses are extremely rare we amass a new and detailed dataset on licensing contracts and use it to present some simple facts concerning licensing behavior our analysis reveals robust cross industries differences in several contractual features such as exclusivity cross licensing ex ante versus ex post technology transfers and licensing to related versus unrelated parties we offer an interpretation of these facts based on cross industry variation in the strength of intellectual property rights

royalties vs fees how do firms pay for foreign technology abstract the theoretical determinants of technology licensing contracts have been extensively studied but empirical evidence is scarce we assemble a data set of all the foreign technology licensing agreements entered into by manufacturing firms in india between 1989 and 1993 industry firm and contract characteristics are used to explain differences between the forms of payment in licensing contracts our findings support theoretical arguments licensing contracts are more likely to use royalties when sales are relatively high while increased volatility of sales and greater profitability favor fixed fee contracts we also find that firms are more likely to use output based payments to control the sale and diffusion of r d or brand intensive know how to unaffiliated firms

measuring positive externalities from unobservable victim precaution an empirical analysis of lojack lojack is a hidden radio transmitter device used for retrieving stolen vehicles because there is no external indication that lojack has been installed it does not directly affect the likelihood that a protected car will be stolen there may however be positive externalities due to general deterrence we find that the availability of lojack is associated with a sharp fall in auto theft rates of other crime do not change appreciably at least historically the marginal social benefit of an additional unit of lojack has been fifteen times greater than the marginal social cost in high crime areas those who install lojack however obtain less than 10 percent of the total social benefits leading to underprovision by the market

pre empted patents infringed patents and firms participation in markets for technology abstract in recent years firms have increasingly contributed to and been confronted with a patent landscape characterized by numerous but marginal inventions overlapping claims and patent fences as a result firms risk their patent applications to be pre empted or to be infringed upon by rivals while both aspects constitute major challenges for the appropriation of returns to inventive activity extant literature suggests that participation in the market for technology might actually resolve or at least alleviate these problems in this paper we investigate the effect of pre empted and infringed patents on firms engagement in in and cross licensing based on a sample of more than 1100 german manufacturing firms our results show that firms engage in in licensing as a reaction to pre empted patents and in cross licensing if their protected ip was infringed upon however these effects vary depending on the fragmentation of technology fields and whether the firm operates in a discrete or complex product industry

choosing a licensee from heterogeneous rivals we examine a rm that can license its production technology to a rival when rms are heterogeneous in production costs we show that a complete technology transfer from one rm to another always increases joint pro t under weakly concave demand when at least three rms remain in the industry a jointly pro table transfer may reduce social welfare although a jointly pro table transfer from the most e cient rm always increases welfare we also consider two auction games under complete information a standard rst price auction and a menu auction by bernheim and whinston 1986 with natural re nement of equilibria we show that the resulting licensees are ordered by degree of e ciency menu auction simple auction and joint pro t maximizing licensees in weakly descending order

corporate governance and innovation a survey abstract the traditional economics of innovation inspired by schumpeter and more recent advances on his work seem unable to explain why firms with similar external conditions may show greatly different performance in innovation contrastingly the literature on corporate governance provides some useful insights for understanding corporate innovation activity to the extent that such literature examines the economic effects of different modes of coordination between firm members the process through which individuals integrate their human and physical resources within the firm is central to the dynamics of corporate innovation this paper provides the first survey of the literature on this issue we start by discussing how various theoretical approaches to the analysis of the firm deal with technological innovation we then describe three main channels corporate ownership corporate finance and labour through which a system of corporate governance shapes a firm s innovation activity finally we examine the relationship between country level institutional settings national patterns of corporate governance and the aggregate innovation activity of corporations we conclude by suggesting that future research should focus more deeply on the interrelation between the various dimensions of corporate governance and on their joint effect on firm innovation

a patent system for both diffusion and exclusion public policy analysis of optimal patent regimes is often framed as a tradeoff between static and dynamic efficiency in this analytical framework weak patent protection and strict antitrust policy are taken to be directed toward static concerns while protection of intellectual property through strong patent laws is taken as a reflection of broader social concerns for long run growth and technological progress this characterization has some truth but the magnitude of the conflict between static and dynamic efficiency can easily be exaggerated in this article i want to argue that weak patent protection need not be inimical to economic growth and conversely that strong patent protection need not be an enemy of diffusion appropriately structured patent law and antitrust rules can together ensure incentives for r d and also induce cooperation among firms in diffusing r d results through licensing and other means at the same time cooperation among firms at the r d stage can counterbalance weak patent protection by internalizing spillovers from ongoing r d programs and such cooperation may also produce additional spillovers from the existing knowledge

international technology licensing monopoly rents transaction costs and exclusive rights as firms increasingly use licensing to exploit knowledge based assets in global technology markets appropriate structuring of these agreements has become an important line of research inquiry one area that has received less attention is the nature of rights granted in inter firm licensing relationships although it is an important clause that has implications for profit generation from licensing of proprietary assets conceptualizing licensing rights in terms of number of licenses granted and exclusivity rights given to a licensee in a foreign market this paper examines the determinants of these rights based on monopoly rents and transaction costs associated with different types of licensing contracts hypotheses are empirically tested through two studies one based on large us manufacturing firms and the other on a cross national sample of medium sized firms actively involved in international technology licensing results from both studies show a greater propensity to use non exclusive multiple licensing when the licensed technology has greater potential to produce differentiated products or when there is greater threat of substitutive technologies entering the market on the other hand innovative technologies and a higher degree of asset specific investments required of the licensee for the technology are related to the use of single exclusive licensing agreements

risk sharing in licensing abstract this paper studies the design of linear license contracts under demand or cost uncertainty the optimal contract consists in general of a mix of a fixed fee and royalties the source of uncertainty has a crucial impact on the type of royalties that must be used in particular under demand uncertainty at most two of the instruments are used the contract generally combines a fixed fee with an ad valorem royalty when cost is uncertain a wider variety of cases can arise the contract may involve a combination of either type of royalties coupled with a fixed fee alternatively it may be optimal to use all three available instruments

debt and growth new evidence for the euro area abstract against the background of the euro area sovereign debt crisis our paper investigates the relationship between public debt and economic growth and adds to the existing literature in the following ways first we use a dynamic threshold panel methodology in order to analyse the non linear impact of public debt on gdp growth second we focus on 12 euro area countries for the period 1990 2010 therefore adding to the current discussion on debt sustainability in the euro area our empirical results suggest that the short run impact of debt on gdp growth is positive and highly statistically significant but decreases to around zero and loses significance beyond public debt to gdp ratios of around 67 this result is robust throughout most of our specifications in the dynamic and non dynamic threshold models alike for high debt to gdp ratios above 95 additional debt has a negative impact on economic activity furthermore we can show that the long term interest rate is subject to increased pressure when the public debt to gdp ratio is above 70 broadly supporting the above findings

optimal licensing of uncertain patents in the shadow of litigation this paper investigates the choice of a licensing mechanism by the holder of a patent whose validity is uncertain we provide sufficient conditions of a general nature under which the licensor prefers to use a per unit royalty contract in particular we show that this is the case for the holders of weak patents if the strategic effect of an increase in a potential licensee s unit cost on the equilibrium industry profit is positive the latter condition is shown to hold in a cournot resp bertrand oligopoly with homogeneous resp differentiated products under general assumptions on the demands faced by firms as a byproduct of our analysis we contribute to the literature on the cost paradox in oligopoly by offering some new insights of independent interest regarding the effects of cost variations on cournot and bertrand equilibria

socially excessive dissemination of patent licences compared with the social optimum a monopolist usually sells too little this result seemingly includes the case of a lab that licences its patented cost innovation katz and shapiro 1986 find conditions under which the lab will issue fewer than the socially optimal number of licences however i find instead that its incentives can be socially too high the monopoly seller may sell too much for example it can be profit maximizing to sell several licences while it is socially optimal that none is sold en comparaison avec l optimum social un monopoleur habituellement vend trop peu voila qui semble tenir pour le cas d un laboratoire qui vend des licences pour une innovation brevetee qui reduit les couts katz shapiro 1986 ont montre dans quelles conditions le laboratoire va emettre moins que le nombre optimal de licences cependant l auteur decouvre que les incitations peuvent plutot l amener a en emettre trop plus que l optimum social par exemple il se peut que la maximisation du profit amene a vendre plusieurs licences alors qu il serait socialement optimal de n en vendre aucune

does sovereign debt weaken economic growth a panel var analysis we estimate panel vector autoregressions to analyze the highly disputed relationship between sovereign debt and economic growth using data on 20 developed countries we find no evidence for a robust effect of debt on growth even for higher levels of debt we do find a significant negative reverse effect of growth on debt which explains the negative correlation

is growth corrupted or bureaucratic panel evidence from the enlarged eu abstractthis article aims at analysing the issue of conditional convergence in the new enlarged european union eu over the period 1995 2012 by means of panel data techniques we examined the issue of conditional convergence in the enlarged eu giving particular attention to the effects of corruption and bureaucracy on growth controlling for a widely used set of explanatory variables such as investment domestic and foreign human capital formation inflation general government final consumption and trade openness furthermore we examine if growth responds differently to corruption and bureaucracy in the new eu members by means of two group specific interaction variables to capture possible different responses to corruption and bureaucracy the analysis reveals evidence of conditional convergence in the enlarged eu with investment share foreign direct investment human capital and country openness appearing as robust growth drivers in contrast inflation and government consumption rather hamper gro

a structural model on the impact of prediscovery licensing and research joint ventures on innovation and product market efficiency abstract using a novel database on prediscovery licensing agreements one type of r d cooperation as well as detailed firm level and semiconductor market specific information we estimate the impact of prediscovery licensing agreements pdlas on innovation and product market efficiency our results show that pdlas reduce innovative activity in the semiconductor industry by 10 percent or 4089 patents throughout the 1989 1999 period on the contrary research joint ventures a different type of r d cooperation increase innovative activity based on a structural model we provide evidence that pdlas increase production costs and semiconductor prices by 1 percent which results in customers paying an additional 1 1 billion for semiconductors per year beyond the common concern that r d cooperations facilitate coordination activities in product markets via price fixing our study highlights that pdlas can be used as an instrument to coordinate r d activities which can reduce innovation activity and increase costs and prices

unbundled debt and economic growth in developed and developing economies an empirical analysis we unbundle the effect of debt on economic growth using a new panel dataset sourced from vague 2014 for 48 countries over the period 1961 to 2015 we distinguish between public private household and non financial corporation debt we use the pvar approach granger causality tests and impulse response to establish causality we also test the heterogeneity in the debt growth relationship across developed and developing countries in our full sample of countries all types of debt appear to be harmful for economic growth the negative effect of public debt appears to be uniform across developed and developing countries although the impact is much stronger on developed countries household debt appears to be expansionary in developing countries whereas contractionary in developed countries non financial corporation debt appears to have no impact on developing countries but negative impact on developed countries finally total debt i e the sum of public household and non financial corporation debt has a negative impact on growth in developed countries but no impact is detected in the case of developing countries

aid and income another time series perspective summary this study provides a replication of the empirical results reported by nowak lehmann dreher herzer klasen and martinez zarzoso 2012 henceforth ndhkm we uncover that ndhkm relied on a regression model which included a log transformation of variables that are not strictly positive this led to nonrandom omission of a large proportion of observations furthermore we show that ndhkm s use of co integrated regressions is not a suitable empirical strategy for estimating the causal effect of aid on income evidence from a panel var model estimated on the dataset of ndhkm suggests a positive and statistically significant long run effect of aid on income

revenue sharing and vertical control in the video rental industry revenue sharing contracts in which retailers pay a royalty on sales to their suppliers are now widely used in the video rental industry we show that revenue sharing is valuable in vertically separated industries in which demand is either stochastic unpredictable or variable e g systematically declining downstream inventory is chosen before demand is realized and downstream firms engage in intrabrand competition unlike two part tariffs revenue sharing achieves the first best outcome by softening retail price competition without distorting retailers inventory decisions our theories are also consistent with trends in prices and availability following retailers adoption of revenue sharing contracts

crime protection investment spillovers theory and evidence from the city of buenos aires abstract this paper studies spillover effects from private crime protection technologies criminals and victims interact in a frictional market for offenses private protection diverts crime towards unprotected targets but also discourages criminal activity the relative strength of these two effects determines the sign of externalities among potential victims using originally collected data from buenos aires evidence shows that i private protection investment is spatially concentrated and ii neighbors investment in private protection has a causal positive and significant effect on own investment to achieve identification i exploit variation in the investment status of close neighbors as induced by their knowledge of crimes targeting friends relatives acquaintances or others and occurred farther away neighbors investment in alarms and cameras significantly increases a household s propensity to invest in the same technology externalities raise the scope for government intervention while geo referenced information on private protection can inform policy with regard to the spatial distribution of policing effort and public investment in security

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

an analysis of cooperative research and development i analyze the effects of cooperative research whereby member firms agree to share the costs andfruits of a research project before they undertake it in this model industrywide agreements tend to have socially beneficial effects when the degree ofproduct market competition is low when there are r d spillovers in the absence of cooperation when a high degree of sharing is technologically feasible and when the agreement concerns basic research rather than development activities i show that a royalty free cross licensing agreement among any number offirms lowers the equilibrium level of innovation even though it increases the efficiency of r d through sharing

patents learning by doing and market structure in the chemical processing industries for a sample of 24 chemical products count data models are used to evaluate firms propensity to patent and the link between patented process innovations and output prices the results show that process patenting was largely an outgrowth of learning by doing propensity to patent increased with firm size but decreased with market concentration reductions in output prices were strongly linked to learning by doing and more weakly to the rate of patenting producer firms appear to have been more successful than non producers in appropriating the value of patented process innovations

drastic innovations and multiplicity of optimal licensing policies abstract considering the licensing of a drastic cost reducing innovation by an outside innovator in an n firm cournot oligopoly we show that when the innovator uses combinations of fees and royalties there are either n 1 or n optimal licensing policies

waiting to imitate on the dynamic pricing of knowledge we study the problem of an inventor who brings to the market an innovation that can be legally imitated imitators may enter the market by imitating the innovation at a cost or by buying from the inventor the knowledge necessary to reproduce and use the invention the possibility of contracting dramatically affects the need for patent protection our results show that i imitators wait to enter the market and the inventor becomes a temporary monopolist ii the inventor sells knowledge through contracts that allow resale by the imitators and iii under certain conditions the inventor s payoff increases with the number of imitators

deterrence by market sharing a strategic incentive for licensing the potential of an incumbent firm to retain its dominant position in a market is a focal point of the modem theory of industrial organization a recent literature examines this issue for markets in which challengers threaten an incumbent s position by engaging in research for a new technology richard gilbert and david newbery 1982 show that an incumbent firm with a firstmover advantage will preempt potential entrants by inventing a new technology slightly earlier than would its rivals in a stochastic r d therefore its introduction does not alter the decision to research when the pre innovation market is characterized by an incumbent and potential entrants stephen salant 1984 shows that licensing ex post to innovation can alter the research decision as anticipation of the returns from future licensing encourages research by the entrant as a counterpoint to the salant result i find that licensing ex ante to research may discourage further research by the entrant indeed this strategic incentive for licensing may be so strong as to persuade the incumbent as well as the entrant to terminate research activity to isolate this incentive for licensing from the one discussed by salant a simple model is constructed in which licensing of future technologies is not desirable anecdotal evidence suggests that the strategic incentive does lead innovators in some markets to license their technologies examples of this information sharing are prevalent in markets where technological change is rapid in the 1940 s standard oil of new jersey discovered a process for synthetic rubber it traded patent rights on this process for a synthetic oil production process discovered by farben a german rubber company in both the synthetic oil and synthetic rubber markets rival companies were department of economics scarsborough college university of toronto toronto ontario canada m5s lal i thank jon cohen and ron saunders for discussions that inspired this paper i am also grateful to yehuda kotowitz andy mclennan jennifer reinganum ralph winter myma wooders two anonymous referees and seminar participants at the university of toronto for helpful comments on earlier drafts

patent pools and cross licensing in the shadow of patent litigation this paper develops a framework to analyze the incentives to form a patent pool or engage in cross licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable it analyzes the private incentives to litigate and compares them with the social incentives it shows that pooling arrangements can have the effect of sheltering invalid patents from challenges this result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other s patents if litigation costs are not too large

optimal cross licensing arrangements collusion versus entry deterrence this paper analyzes optimal cross licensing arrangements between incumbent firms in the presence of potential entrants the optimal cross licensing royalty rate trades off incentives to sustain a collusive outcome vis a vis incentives to deter entry with the threat of patent litigation we show that a positive cross licensing royalty rate which would otherwise relax competition and sustain a collusive outcome dulls incentives to litigate against entrants our analysis can shed light on the puzzling practice of royalty free cross licensing arrangements between competing firms in the same industry as such arrangements enhance incentives to litigate against any potential entrants and can be used as entry deterrence mechanism

does government debt crowd out capital formation a dynamic approach using panel var abstract we estimate a panel vector autoregression model using data for 127 countries from 1980 to 2017 in order to identify the dynamic relationship between public debt and the growth of capital formation our results provide evidence for the crowding out effect of government debt and the subsequent drop in output growth the impulse response functions for sub samples of countries reveal two remarkable results first the response of capital formation to a shock in debt appears to be consistent across different income categories of countries and does not depend on the size of debt to gdp ratio second the magnitude and persistence of this effect is lower for the high income countries the results obtained are robust to various model specifications as well as for alternative proxies of debt and capital formation

innovative strategic groups in multinational industries abstract differences in innovative strategies between groups of domestic and multinational enterprises are analyzed within a two stage game model that incorporates the asymmetries in transaction costs between the two species of enterprises nash and cooperative behaviour is shown to result in different equilibrium r d strategies with the multinational companies doing typically more r d for larger markets and domestic companies focusing on specific market segments survey data from companies operating in eleven high tech multinational industries in belgium provide support for these strategic differences and show how they are related to company performance

does high public debt consistently stifle economic growth a critique of reinhart and rogoff we replicate reinhart and rogoff 2010a and 2010b and find that selective exclusion of available data coding errors and inappropriate weighting of summary statistics lead to serious miscalculations that inaccurately represent the relationship between public debt and gdp growth among 20 advanced economies over 1946 2009 countries with public debt gdp ratios above 90 averaged 2 2 real annual gdp growth not 0 1 as published the published results for i median gdp growth rates for the 1946 2009 period and ii mean and median gdp growth figures over 1790 2009 are all distorted by similar methodological errors although the magnitudes of the distortions are somewhat smaller than with the mean figures for 1946 2009 contrary to reinhart and rogoff s broader contentions both mean and median gdp growth when public debt levels exceed 90 of gdp are not dramatically different from when the public debt gdp ratios are lower the relationship between public debt and gdp growth varies significantly by period and country our overall evidence refutes rr s claim that public debt gdp ratios above 90 consistently reduce a country s gdp growth

milestone payments or royalties contract design for r d licensing we study how innovators can optimally design licensing contracts when there is incomplete information on the licensee s valuation of the innovation and limited control over the licensee s development efforts a licensing contract typically contains an up front payment milestone payments at successful completion of a project phase and royalties on sales we use principal agent models to formulate the licensor s contracting problem and we find that under adverse selection the optimal contract structure changes with the licensee s valuation of the innovation as the licensee s valuation increases the licensor s optimal level of involvement in the development directly or through royalties should decrease only a risk averse licensor should include both up front and milestone payments moral hazard alone is not detrimental to the licensor s value but may create an additional value loss when combined with adverse selection our results inform managerial practice about the advantages and disadvantages of the different terms included in licensing contracts and recommend the optimal composition of the contract

university licensing of patents for varietal innovations in agriculture there has been a sharp increase in the number of patented agricultural products from public universities in the united states we develop an experiment to examine the revenue stream to universities from licensing plant based innovations in the experiment we asked subjects to bid for access for a patented input that would be used to manufacture a differentiated product treatments were employed to solicit bids that were financed by fees royalties and a combination of the two mechanisms under exclusive and non exclusive contracts the literature studying the economics of downstream duopoly competition in quantity suggests that revenues for the innovator would be greatest under a non exclusive contract that uses fees and royalties in our experiment we allow more than two firms to obtain access to the patent in the non exclusive treatments and our empirical results suggest that innovator revenues are greatest when royalties are used alone in a non exclusive contract

fee versus royalty reconsidered for an outsider innovator in a cournot oligopoly royalty licensing could be superior to both fixed fee and auction the result depends on a simple fact that has been overlooked in the existing literature namely the number of licenses can take only integer values

r d rivalry with licensing or imitation the authors study the rivalry between two firms to develop an innovation in a dynamic setting that allows for post development dissemination of the innovation such as licensing or imitation this dissemination may cause the noninnovating firm to benefit from the discovery when this occurs conventional results in the economics of r d no longer need apply they find that industry leaders will tend to develop minor innovations but will develop major innovations only if imitation is difficult copyright 1987 by american economic association

optimal licensing of technology in the face of asymmetric competition abstract we reconsider the optimal technology licensing by an incumbent firm facing multiple competitors first we cover the case of one license and show that competition has a drastic effect on optimal two part tariffs we also consider license auctions and design a more profitable dynamic mechanism next we allow the licensor to award multiple licenses and design a dynamic mechanism that extracts the maximum industry profit it awards licenses to all firms prescribes maximum permitted royalty rates and positive fixed fees and is more profitable than other dynamic mechanisms finally we show that a slight modification of that mechanism is also optimal for outside patent holders

technology transfer with moral hazard abstract this paper develops an incomplete contract model of the licensing relationship that is susceptible to the moral hazard problem the optimal contractual form of licensing derived in the model generates predictions that seem to be consistent with actual practice for instance the introduction of inputs that are not contractible and costly explains the prevalence of royalty contracts in the licensing relationship moreover the model is able to relate the size of the royalty rate to the parameters that represent the environments under which the concerned parties operate finally the model can be naturally extended to analyze the choice of a technology holder between direct investment and licensing in an attempt to serve a foreign market

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

fixed fee liscensing of innovations and collusion unlike other types of licensing agreements such as those with output restrictions market division clauses or output royalties licensing contracts with only a fixed fee have been perceived as having no anticompetitive consequences this paper illustrates that fixed fee licensing may facilitate collusion by enhancing the licensee s ability to credibly punish deviations from the collusive outcome on the part of the licenser antitrust implications of the result and potential ways of detecting collusion motivated licenses are discussed copyright 1996 by blackwell publishing ltd

panic on the streets of london police crime and the july 2005 terror attacks in this paper we study the causal impact of police on crime by looking at what happened to crime before and after the terror attacks that hit central london in july 2005 the attacks resulted in a large redeployment of police officers to central london boroughs as compared to outer london in fact police deployment in central london increased by over 30 percent in the six weeks following the july 7 bombings during this time crime fell significantly in central relative to outer london study of the timing of the crime reductions and their magnitude the types of crime which were more likely to be affected and a series of robustness tests looking at possible biases all make us confident that our research approach identifies a causal impact of police on crime implementing an instrumental variable approach shows an elasticity of crime with respect to police of approximately 0 3 so that a 10 percent increase in police activity reduces crime by around 3 percent

how to license intangible property we examine the optimal licensing strategy of a research lab selling to firms who are product market competitors we consider an independent lab as well as a research joint venture we show that 1 demands are interdependent and hence the standard price mechanism is not the profit maximizing licensing strategy 2 the seller s incentives to develop the innovation may be excessive 3 the seller s incentives to disseminate the innovation typically are too low 4 larger ventures are less likely to develop the innovation and more likely to restrict its dissemination in those cases where development occurs and 5 a downstream firm that is not a member of the research venture is worse off as a result of the innovation

licensing a new product with non linear contracts this paper looks at a situation where a licensor owns a patent on a technology that allows the production of a new good the licensor seeks to license its innovation to a set of producers that differ according to their marginal cost of producing an existing good we show that the licensor is able to obtain the profit a monopolist would achieve by producing the new good the equilibrium licensing contract specifies both a fixed fee and a royalty scheme based on the production of a licensee le memoire examine la situation ou un detenteur de brevet sur une technologie qui permet de produire un nouveau bien cherche a ceder une autorisation d exploiter cette innovation a un ensemble de producteurs qui ont differents couts marginaux de production d un bien existant on montre que le detenteur de brevet est capable d obtenir le profit qu un monopoleur obtiendrait en produisant le nouveau bien le contrat de licence d equilibre specifie a la fois un paiement forfaitaire et un arrangement de royautes sur la base du volume de production de l exploitant

dynamic patent licensing abstract this paper shows one way a fixed fee can dominate an auction if no one knows whether the innovation will succeed or not when it appears and if its life exceeds the life of the patent then selling one licence by fixed fee maximizes inventor profit for some probabilities of success the reason is a nonlicensee is better off when a rival buys a license because this reveals the nature of the innovation if it succeeds the nonlicensee can adopt in the future after the patent has expired this expected future gain can outweigh the expected loss during the life of the patent

novelty and disclosure in patent law the stringency of the novelty requirement in patent law affects the pace of innovation because it affects the amount of technical information that is disclosed among firms it also affects ex ante profitability of research we compare weak and strong novelty requirements from the standpoint of social efficiency we ask how our answer depends on the rule that determines which firm gets a patent when two firms have patents pending on the same technology the possible rules are first to invent which applies in the u s and first to file which applies everywhere else

the race between deterrence and displacement theory and evidence from bank robberies security measures that deter crime may unwittingly displace it to neighboring areas but evidence of displacement is scarce we exploit precise information on the timing and locations of all italia

general licensing schemes for a cost reducing innovation optimal combinations of upfront fees and royalties are considered for a cost reducing innovation in a cournot oligopoly for both outside and incumbent innovators it is shown that for any nondrastic innovation a the license is practically sold to all firms ensuring full diffusion of the innovation b consumers are better off firms are worse off and the social welfare is improved c the optimal licensing policy involves positive royalty for relatively significant innovations d compared to an incumbent firm an outsider invests more in r d and has higher incentive to innovate and e as a function of the magnitude of the innovation the industry size that provides the highest incentive to innovate is u shaped

public debt economic growth and the real interest rate a panel var approach to eu and oecd countries we investigate the causal relationship between the public debt to gdp ratio and economic growth for 31 eu and oecd countries from 1995 to 2013 a number of studies have tackled this problem but very few make the transmission mechanism explicit in their analysis we estimate a panel var model that incorporates the long term real interest rate on government bonds as a vehicle to transmit shocks in both the public debt to gdp ratio and economic growth we find no causal link from the public debt to gdp ratio to the gdp growth rate irrespective of the levels of public debt rather we find a causal relation from the gdp growth rate to the public debt to gdp ratio in high debt countries the direct negative impact of economic growth on public debt is enhanced by a rise in the long term real interest rate which in turn decreases interest sensitive demand and leads to a further increase in the public debt to gdp ratio

the effectiveness of reward systems on innovative output an empirical analysis this study investigated the relationship of patent output to the reward systems for individual r d scientists in high technology firms a survey of technical managers in 57 connecticut firms collected information on firm size r d expenditure and the frequency of use of eighteen different reward systems using a regression model patent output was found to be dependent on firm size r d expenditure and on monetary and non monetary reward systems informal award programs and variable bonuses based on the issue of patents when a subset of small firms was investigated separately non monetary rewards were shown to be ineffective however variable bonuses remained important to patent output and large sum reward payments 50 000 also demonstrated a significant effect

on the duration of technology licensing abstract we model an innovator s choice of payment scheme and duration as a joint decision in a multi period licensing game with potential future innovations and some irreversibility of technology transfer we find that it may be optimal to license the innovation for less than the full length of the patent and that royalty contracts can be more profitable than fixed fee licensing even in the absence of information asymmetry and risk aversion moreover licensing contracts based on royalty have a longer duration than fixed fee licenses and are more likely to be used in industries where innovations are frequent and intellectual property protection is weak our paper also highlights an important link between the study of technology licensing and the theory of durable goods

revisiting the bi directional causality between debt and growth evidence from linear and nonlinear tests abstract we revisit the bi directional causality between public debt and the rate of gdp growth for 10 emu countries alongside the us uk and japan over sample periods spanning from 1970 up to 2014 whilst accounting for the nonlinear properties of both the individual time series and their relation in both directions our results indicate that the causal relation between debt and growth in either direction is weak at best for most of the countries in our sample we find no robust evidence of a long run causal effect using bi variate granger causality tests bi directional causality is detected only for austria while for france luxembourg and portugal causality runs solely from debt to growth but the estimated effects are very small in finland spain and italy granger causality from growth to debt in the former two and debt to growth in italy appears to be present in the short run our findings cannot be taken as evidence that a high level of public indebtedness is not risky for the economy or as invalidating hypotheses postulating effects in either direction in the relation between debt and growth

per unit vs ad valorem royalties under asymmetric information we study an inside patent holder s optimal licensing policy when it has imperfect information about the value of the patent to its rival the patent holder can choose any two part licensing fee with either per unit or ad valorem royalties we demonstrate that the equilibrium will be either a fully separating contract with different per unit royalty rates or a contract with a single ad valorem royalty that excludes a high cost rival fixed fees will not be used the presence of asymmetric information uniquely drives the per unit royalties that otherwise would not be adopted per unit royalties always generate higher social welfare than ad valorem royalties

a general equilibrium model of crime commission and prevention abstract the model developed in this paper features a general equilibrium specification of the relationships among criminals victims of crime and a law enforcement agency these relationships are employed to endogenously derive an explicit intuitively appealing technology of crime commission and prevention the solution to the present model is therefore obtained with a set of more elementary assumptions than the previous literature where arbitrary curvature assumptions are invoked

optimising criminal behaviour and the disutility of prison we use rich microdata on bank robberies to estimate individual level disutilitiesities of imprisonment the identification rests on the money versus apprehension trade off that robbers face inside the bank when deciding whether to leave or collect money for an additional minute the distribution of the disutility of prison is not degenerate generating heterogeneity in behaviour our results show that unobserved heterogeneity in robber ability is important for explaining outcomes in terms of haul and arrest furthermore higher ability robbers are found to have larger disutilities suggesting that increased sentence lengths might effectively target these more harmful criminals

licensing radical product innovations to speed up the diffusion abstract we present a differential game to study how companies can simultaneously license their innovations to other firms when launching a new product the licensee may cannibalize licensor s sales albeit this can be compensated by gains from royalties nonetheless patent royalties are generally so low that licensing is not an attractive strategy in this paper we consider the role of licensing to speed up the product diffusion word of mouth by licensee s customers and licensee s advertising indirectly push forward sales of the licensing company accelerating new product diffusion we find evidence that licensing can be a potentially profitable strategy however we also find that a weak intellectual property right ipr protection can easily diminish the financial attractiveness of licensing

shirking sharing risk and shelving the role of university license contracts abstract in this paper we develop a theoretical model of university licensing to explain why university license contracts often include payment types that differ from the fixed fees and royalties typically examined by economists our findings suggest that milestone payments and annual payments are common because moral hazard risk sharing and adverse selection all play a role when embryonic inventions are licensed milestones address inventor moral hazard without the inefficiency inherent in royalties the potential for a licensee to shelve inventions is an adverse selection problem which can be addressed by annual fees if shelving is unintentional but may require an upfront fee if the firm licenses an invention with the intention to shelve it whether the licensing contract prevents shelving depends in part on the university credibly threatening to take the license back from a shelving firm this supports the rationale for bayh dole march in rights but also shows the need for the exercise of these rights can be obviated by contracts