Licensing in an international market

Ferreira, Fernanda A.

http://hdl.handle.net/10400.22/4358

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Authors

Ferreira, Fernanda A.

Abstract(s)

We study the effects of entry of a foreign firm on domestic welfare in the presence of licensing, when the entrant is technologically superior to the incumbent. We show that foreign entry increases domestic welfare for sufficiently large technological differences between the firms under both fixed-fee licensing and royalty licensing.