An innovation adoption model of licensing-in for US start-ups

Authors

  • Bernadette Power University College Cork
  • Gavin C. Reid Senior Research Associate, Centre for Business Research, Cambridge Judge Business School, University of Cambridge and Honorary Professor of Economics, School of Economics and Finance, University of St. Andrews

DOI:

https://doi.org/10.17811/ebl.10.4.2021.369-382

Abstract

Using the Kauffman panel dataset of US start-ups, we analyse the key determinants of
licensing-in adoption. Licensing-in entails an intellectual property contract between the licensor
(e.g. upstream established firm) and licensee (e.g. downstream start-up) aiming to bring an
innovation to market rapidly. Assuming maximizing of the owner’s managerial utility in the
start-up years, we explain licensing-in adoption through firm characteristics like size, R&D and
capital structure, as well as other IP types, and controls for year and regional fixed effects, using
panel probit estimation with adjustments for sample selection bias and endogeneity. We find
key determinants of licensing-in to be owners’ equity, product (rather than service) sales and
R&D spend; and then comment on their policy implications for business incubation.

Author Biography

Gavin C. Reid, Senior Research Associate, Centre for Business Research, Cambridge Judge Business School, University of Cambridge and Honorary Professor of Economics, School of Economics and Finance, University of St. Andrews

Gavin C Reid is Senior Research Associate, CBR, Judge Business School, Cambridge University, and Honorary Professor in Economics & Finance, St Andrews University. The author of over two hundred research papers, and ten books, including Theories of Industrial Organization, Small Business Enterprise, and Venture Capital Investment, his research interests range over economics, accounting, finance and law.

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Published

2021-12-09

How to Cite

Power, B., & Reid, G. C. (2021). An innovation adoption model of licensing-in for US start-ups. Economics and Business Letters, 10(4), 369-382. https://doi.org/10.17811/ebl.10.4.2021.369-382

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Articles