The Historical Market for Technology Licenses: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany

31 Pages Posted: 31 Aug 2009

See all articles by Carsten Burhop

Carsten Burhop

Max Planck Institute for Research on Collective Goods

Thorsten Luebbers

Max Planck Institute for Research on Collective Goods

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

Burhop, Carsten and Luebbers, Thorsten, The Historical Market for Technology Licenses: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany (August 2009). MPI Collective Goods Preprint, No. 2009/25, Available at SSRN: https://ssrn.com/abstract=1463249 or http://dx.doi.org/10.2139/ssrn.1463249

Carsten Burhop (Contact Author)

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Thorsten Luebbers

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany