Intellectual Property Rights and Licensing: An Econometric Investigation
Guifang Yang, and Keith Maskus
Licensing has been virtually ignored in the econometric literature on intellectual property rights (IPRs). We discuss theoretical effects of IPRs on decisions to license technology internationally. Based on a theoretical model we specify a reduced-form econometric equation relating the volume of U. S. licensing to measures of technology protection and other variables in licensee nations. The model is applied to data for 23 countries in a panel covering 1985, 1990, and 1995. The results indicate that countries with stronger patent rights attract larger arm's-length volumes of licensed technology, though we are unable to distinguish between licensing quantities and values.