The Historical Market for Technology Licenses: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany
31 Pages Posted: 31 Aug 2009
Date Written: August 2009
Abstract
We investigate a sample of 180 technology licensing contracts closed by German chemical, pharmaceutical, and electrical engineering companies between 1880 and 1913. A regression analysis shows that licensing contracts closed before a patent was granted and contracts closed between firms and individual inventors had a higher probability of including a profit-sharing clause. This supports Jensen and Thursby’s (2001) model, who propose equity-sharing licensing contracts to solve moral hazard problems. Moreover, we show that milestones were a substitute for profit shares. Furthermore, exclusive licences offered a significantly higher profit share to the licensor.
Keywords: Economic history, Germany, Licensing contracts, pre-1913, Technology transfer
JEL Classification: L14, N83, O32
Suggested Citation: Suggested Citation
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