nep-sog New Economics Papers
on Sociology of Economics
Issue of 2006‒08‒19
one paper chosen by
Jonas Holmstrom
Swedish School of Economics and Business Administration

  1. The Impact of Royalty Sharing Incentives on Technology Licensing in Universities By Saul Lach; Mark Schankerman

  1. By: Saul Lach; Mark Schankerman
    Abstract: Using data on U.S. universities, we show that universities that give higher royalty shares to facultyscientists generate greater license income, controlling for other factors including university size,quality, research funding, and local demand conditions. We use pre-sample data on universitypatenting to control for the endogeneity of royalty shares. The incentive effects are larger in privateuniversities than in public ones, and we provide survey evidence on performance-based pay,government constraints and objectives of Technology License Offices that helps explain this finding.Royalty incentives work through two channels — raising faculty effort and sorting scientists acrossuniversities. The effect of incentives is mainly to increase the quality rather than the quantity ofinventions.
    Keywords: royalty incentives, invention, technology licensing
    JEL: O31 O34 L2 L3
    Date: 2006–06

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