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Technology licensing under optimal tax policy

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Abstract

This paper examines the role of government policy in technology licensing decision. We show that both the outside and the inside innovators license a new product (or drastic process innovation) to all potential licensees in the presence of tax/subsidy policies. An implication of our analysis is that a monopolist producer may prefer technology licensing in a homogeneous goods industry. Our results also provide a rationale for franchising to multiple sellers.

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Authors and Affiliations

  1. University of York, Heslington, York, UK

    Arijit Mukherjee

  2. CESifo, Munich, Germany

    Arijit Mukherjee

  3. Department of Applied Economics, National University of Kaohsiung, Kaohsiung, 811, Taiwan

    Yingyi Tsai

Authors
  1. Arijit Mukherjee
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  2. Yingyi Tsai
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Correspondence to Yingyi Tsai.

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Mukherjee, A., Tsai, Y. Technology licensing under optimal tax policy. J Econ 108, 231–247 (2013). https://doi.org/10.1007/s00712-012-0277-5

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  • DOI: https://doi.org/10.1007/s00712-012-0277-5

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