Skip to main content
SpringerLink
Log in

How does firm size affect technology licensing? Empirical evidence from China

  • Published:
Scientometrics Aims and scope Submit manuscript

Abstract

Technology licensing is viewed as the key factor for activating the sleeping patents. This study re-examines the relationship between the firm size and its technology licensing activity. The empirical results show that there is a U-shaped relationship between the firm size and technology licensing. However, this U-shaped relationship appears only in the markets with high competition, which confirms a moderate role of the technology competition in the relationship between the firm size and technology licensing. Chinese firms lag behind developed countries in terms of the licensing strategies. e.g., Chinese firms have fewer patents that are cross licensed. China’s export-oriented firms show relatively more positive licensing propensity, where large, small and medium sized firms do not show essentially different willingness to license out their patents compared with non export-oriented firms. China’s state owned firms are less likely to license out their patents compared with that of private firms. Policy implications are presented at the end of this study.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Almeida, P., & Kogut, B. (1997). The exploration of technological diversity and the geographic localization of innovation: start-up firms in the semiconductor industry. Small Business Economics, 9, 21–31.

    Article  Google Scholar 

  • Amable, B., Chatelain, J. B., & Ralf, K. (2010). Patents as collateral. Journal of Economic Dynamics and Control, 34, 1092–1104.

    Article  MathSciNet  MATH  Google Scholar 

  • Anand, B., & Khanna, T. (2000). The structure of licensing contracts. Journal of Industrial Economics, 48, 103–135.

    Article  Google Scholar 

  • Arora, A. (1997). Patents, licensing, and market structure in the chemical industry. Research Policy, 26, 391–403.

    Article  Google Scholar 

  • Arora, A., & Ceccagnoli, M. (2006). Patent protection, complementary assets, and firm’s incentives for technology licensing. Management Science, 52, 293–308.

    Article  Google Scholar 

  • Arora, A., & Fosfuri, A. (2000). The market for technology in the chemical industry: causes and consequences. Revue D’economie Industrielle, 92, 317–334.

    Article  Google Scholar 

  • Arora, A., & Fosfuri, A. (2003). Licensing the market for technology. Journal of Economic Behavior & Organization, 52, 277–295.

    Article  Google Scholar 

  • Arora, A., Fosfuri, A., & Gambardella, A. (2001a). Markets for technology: the economics of innovation and corporate strategy. Academy of Management Review, 27, 1275–1276.

    Google Scholar 

  • Arora, A., Fosfuri, A., & Gambardella, A. (2001b). Markets for technology and their implications for corporate strategy. Industrial and Corporate Change, 10, 419–451.

    Article  Google Scholar 

  • Barney, J. B. (1986). Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32, 1231–1241.

    Article  Google Scholar 

  • Breschi, S., Lissoni, F., & Malerba, F. (2003). Knowledge relatedness in firm technological diversification. Research Policy, 32, 69–87.

    Article  Google Scholar 

  • Chesbrough, H., & Crowther, A. K. (2006). Beyond high tech: Early adopters of open innovation in other industries. R&D Management, 36, 229–236.

    Article  Google Scholar 

  • Cockburn, I. (2007). Is the market for technology working? Obstacles to licensing inventions and ways to remove them: Paper presented at the Monte Verità conference on the economics of technology policy. Monte Verità, Ascona, June 17–21.

  • Cohen, W., Nelson, R., & Walsh, J. (2002). Links and Impacts: The Influence of Public Research on Industrial R&D. Management Science, 48(1), 1–23.

    Article  Google Scholar 

  • Contractor, F. J., & Sagafi-Nejad, T. (1981). International technology transfer: major issues and policy responses. Journal of International Business Studies, 12, 113–135.

    Article  Google Scholar 

  • EPO (2014), Patent filings survey 2014, Intentions of applicants regarding patent applications at the European patent office and other offices.

  • Fischer, T., & Ringler, P. (2014). What patents are used as collateral?—An empirical analysis of patent reassignment data. Journal of Business Venturing, 29, 633–650.

    Article  Google Scholar 

  • Fosfuri, A. (2006). The licensing dilemma: Understanding the determinants of the rate of technology licensing. Strategic Management Journal, 27, 1141–1158.

    Article  Google Scholar 

  • Gambardella, A., Giuri, P., & Luzzi, A. (2007). The market for patents in Europe. Research Policy, 36, 1163–1183.

    Article  Google Scholar 

  • Granstrand, O., Patel, P., & Pavitt, K. (1997). Multi-technology corporations: Why they have distributed rather than distinctive core competencies. California Management Review, 39, 8–25.

    Article  Google Scholar 

  • Grindley, P. C., & Teece, D. J. (2003). Managing intellectual capital: Licensing and cross licensing in semiconductor and electronics. California Management Review, 39, 8–41.

    Article  Google Scholar 

  • Heeley, M. B., & Jacobson, R. (2008). The recency of technological inputs and financial performance. Strategic Management Journal, 29, 723–744.

    Article  Google Scholar 

  • Kim, J. (2000). Reputation and international technology transfer: A comparative study of Japanese, European and American corporations in Korea. International Business Review, 9, 613–624.

    Article  Google Scholar 

  • Kollmer, H., & Dowling, M. (2004). Licensing as a commercialisation strategy for new technology-based firms. Research Policy, 33, 1141–1151.

    Article  Google Scholar 

  • Lerner, J. (1994). The importance of patent scope: An empirical analysis. RAND Journal of Economics, 25, 319–333.

    Article  Google Scholar 

  • Liu, X. (2008). China’s development model: An alternative strategy for technological catch-up. Working paper, Oxford University.

  • Li-Ying, J., & Wang, Y. (2015). Find them home or abroad? The relative contribution of international technology in-licensing to “Indigenous Innovation” in China. Long Range Planning, 48, 123–134.

    Article  Google Scholar 

  • Masayo, K., & Motohashi, k. (2012). Understanding the technology market for patents: New insights from a licensing survey of Japanese firms. Research Policy, 41, 226–235.

    Article  Google Scholar 

  • Miller, K. (2002). Knowledge inventories and managerial myopia. Strategic Management Journal, 23, 689–706.

    Article  Google Scholar 

  • Motohashi, K. (2008). Licensing or not licensing? An empirical analysis of the strategic use of patents by Japanese firms. Research Policy, 37(9), 1548–1555.

    Article  Google Scholar 

  • Nerkar, A. (2003). Old is gold? The value of temporal exploration in the creation of new knowledge. Management Science, 49, 211–229.

    Article  Google Scholar 

  • Nishimura, J., & Okada, Y. (2014). R&D portfolios and pharmaceutical licensing. Research Policy, 43, 1250–1263.

    Article  Google Scholar 

  • NISTEP (National Institute of Science and Technology Policy), (1997). Appropriability and technological opportunity in innovation: A Japan–U.S. comparative study using survey data. NISTEP Report No. 48.

  • Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14, 179–191.

    Article  Google Scholar 

  • Pitketly, R. (2001). Intellectual property strategy in Japanese and UK companies: patent licensing decisions and learning opportunities. Research Policy, 30, 425–442.

    Article  Google Scholar 

  • Pluvia Zuniga, M., & Guellec, D. (2009). Who licenses out patents and why?: Lessons from a business survey. OECD Science, Technology and Industry Working Papers, 05, Paris: OECD Publishing.

  • Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79–91.

  • Razgaitis, R. (2004). US/Canadian licensing in 2003: Survey results. Journal of the Licensing Executive Society, 34, 139–151.

    Google Scholar 

  • Reitzig, M. (2004). Improving patent valuations for management purposes—validating new indicators by analyzing application rationales. Research Policy, 33, 939–957.

    Article  Google Scholar 

  • Rivette, K. G., & Kline, D. (2000). Discovering new value in intellectual property. Harvard Business Review, 78, 54–66.

    Google Scholar 

  • Rumelt, R. P. (1984). Towards a strategic theory of the firm. In R. B. Lamb (Ed.), Competitive strategic management (pp. 556–570). Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • Sun, X., & Hong, J. (2011). Exports, ownership and firm productivity: Evidence from China. The World Economy, 34, 1199–1215.

    Article  Google Scholar 

  • Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15, 285–305.

    Article  Google Scholar 

  • Tobin, J. (1956). Estimation of relationships for limited dependent variables. Econometrica, 26(1), 24–36.

    Article  MathSciNet  MATH  Google Scholar 

  • Wang, Y., Cao, W., Zhou, Z., & Ning, L. (2013). Does external technology acquisition determine export performance? Evidence from chinese manufacturing firms. International Business Review, 22, 1079–1091.

    Article  Google Scholar 

  • Wang, Y., & Li-Ying, J. (2014). When does inward technology licensing facilitate firms’ npd performance? A contingency perspective. Technovation, 34, 44–53.

    Article  Google Scholar 

  • WIPO (2008), Concept of a technology classification for country comparisons, www.wipo.int/ipstats/en/statistics/patents.

  • Ziedonis, R. H., & Hall, B. H. (2001). The effects of strengthening patent rights on firms engaged in cumulative innovation: insights from the semiconductor industry. Social Science Electronic Publishing, 13, 133–187.

    Google Scholar 

Download references

Acknowledgements

This study was supported by the key project of National Natural Science Foundation of China (71332003) and the National Natural Science Foundation of China (71402175).

Author information

Authors and Affiliations

  1. School of Economics and Management, Beihang University, Beijing, 100191, China

    Ming Li & Xiangdong Chen

  2. School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing, 100049, China

    Gupeng Zhang

Authors
  1. Ming Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Xiangdong Chen
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Gupeng Zhang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Gupeng Zhang.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Li, M., Chen, X. & Zhang, G. How does firm size affect technology licensing? Empirical evidence from China. Scientometrics 112, 1249–1269 (2017). https://doi.org/10.1007/s11192-017-2451-6

Download citation

  • Received:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11192-017-2451-6

Keywords

Search

Navigation