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Licensing Innovation in Mixed Multinational Markets with Stackelberg Leadership

Licensing Innovation in Mixed Multinational Markets with Stackelberg Leadership   This article departs from existing literature by including licensing in a multinational market where the innovator is the Stackelberg leader. When the domestic mixed-ownership firm is the leading innovator, it focuses on local social welfare. Thus, the royalty it charges becomes a function of level privatization. As the private share in the domestic firm increases, the leader increases the royalty it charges. The relationship is reversed when the foreign firm becomes the innovator. The optimal licensing policy is a mix of a fixed fee and a royalty, with a difference that a Stackelberg leader charges more than a Cournot competitor. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Journal of Industry, Competition and Trade" Springer Journals

Licensing Innovation in Mixed Multinational Markets with Stackelberg Leadership

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References (27)

Publisher
Springer Journals
Copyright
Copyright © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022
ISSN
1566-1679
eISSN
1573-7012
DOI
10.1007/s10842-022-00389-5
Publisher site
See Article on Publisher Site

Abstract

  This article departs from existing literature by including licensing in a multinational market where the innovator is the Stackelberg leader. When the domestic mixed-ownership firm is the leading innovator, it focuses on local social welfare. Thus, the royalty it charges becomes a function of level privatization. As the private share in the domestic firm increases, the leader increases the royalty it charges. The relationship is reversed when the foreign firm becomes the innovator. The optimal licensing policy is a mix of a fixed fee and a royalty, with a difference that a Stackelberg leader charges more than a Cournot competitor.

Journal

"Journal of Industry, Competition and Trade"Springer Journals

Published: Dec 1, 2022

Keywords: Mixed oligopoly; Innovation; Optimal licensing; Partial privatization; Unit royalty; Fixed fee; I20; I21; I23

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