Understanding Licensing Behavior: A Rent Dissipation Lens on NIH, Product Market Competition and Sunk Costs

Goretti Cabaleiro, Solon Moreira, Toke Reichstein

    Research output: Contribution to conferencePaperResearchpeer-review


    The potential for rent dissipation has been argued to be the main cause of firms? licensing out behavior being stifled.However, this aspect has been scarcely studied empirically. We draw on rent dissipation arguments, and hypothesize that firms suffering from the not-invented-here (NIH) syndrome, firms in competitive product markets, and firms that have incurred substantial sunk cost are associated with lower rates of technology out-licensing. We also posit that sunk costs negatively moderate the relationship between competition in the licensor?s product market, and licensing rate. We test our hypotheses using a sample of 151 licensors involved in licensing contracts in the U.S. pharmaceutical industry during the period 1984-2004. We find broad support for our theoretical arguments.
    Original languageEnglish
    Publication date2015
    Number of pages28
    Publication statusPublished - 2015
    EventThe DRUID Society Conference 2015: The Relevance of Innovation - LUISS Business School, Rome, Italy
    Duration: 15 Jun 201517 Jun 2015
    Conference number: 37


    ConferenceThe DRUID Society Conference 2015
    LocationLUISS Business School
    SponsorLUISS Guido Carli - Libera Università Internazionale degli Studi Sociali Guido Carli
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