Experience and signaling value in technology licensing contract payment structures

Whencommercializing technology, the lack of proven results and a reluctance toinvest upfront resources hamper efforts by firms to work jointly with inventorsto bring new discoveries to market. An effective contract payment structure – amix of upfront and royalty payments – can help overcome these hu...

Full description

Saved in:
Bibliographic Details
Main Authors: KOTHA, Reddi, CRAMA, Pascale, KIM, Phillip H.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6024
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7023/viewcontent/amj.2015.1233.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
id sg-smu-ink.lkcsb_research-7023
record_format dspace
spelling sg-smu-ink.lkcsb_research-70232019-09-11T08:01:20Z Experience and signaling value in technology licensing contract payment structures KOTHA, Reddi CRAMA, Pascale KIM, Phillip H. Whencommercializing technology, the lack of proven results and a reluctance toinvest upfront resources hamper efforts by firms to work jointly with inventorsto bring new discoveries to market. An effective contract payment structure – amix of upfront and royalty payments – can help overcome these hurdles. Weconduct our research in university technology licensing, where licensingmanagers act as intermediaries to unite inventors and licensee firms. Rather than leveraging their experience to bargainfor maximum payments, highly experienced managers offer contractual paymentstructures that trade lower upfront payments for higher royalty payments inorder to signal value. The signal instills confidence in the value of the partnership forskeptical licensee firms, and experienced licensingmanagers can amplify signals as needed to overcome the uncertainties inherentin technology commercialization. By explicitly addressing these variationsin signal strength, we develop new theory that builds on classical signalingprinciples. We test and confirm these predictions in a sample of over 950 invention-licensingcontracts. In addition to advancing signaling theory, our work has implicationsfor academic entrepreneurship, and for how experience shapes value-sharingagreements in collaborative innovations. 2018-08-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/6024 info:doi/10.5465/amj.2015.1233 https://ink.library.smu.edu.sg/context/lkcsb_research/article/7023/viewcontent/amj.2015.1233.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Operations and Supply Chain Management Strategic Management Policy Technology and Innovation
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Operations and Supply Chain Management
Strategic Management Policy
Technology and Innovation
spellingShingle Operations and Supply Chain Management
Strategic Management Policy
Technology and Innovation
KOTHA, Reddi
CRAMA, Pascale
KIM, Phillip H.
Experience and signaling value in technology licensing contract payment structures
description Whencommercializing technology, the lack of proven results and a reluctance toinvest upfront resources hamper efforts by firms to work jointly with inventorsto bring new discoveries to market. An effective contract payment structure – amix of upfront and royalty payments – can help overcome these hurdles. Weconduct our research in university technology licensing, where licensingmanagers act as intermediaries to unite inventors and licensee firms. Rather than leveraging their experience to bargainfor maximum payments, highly experienced managers offer contractual paymentstructures that trade lower upfront payments for higher royalty payments inorder to signal value. The signal instills confidence in the value of the partnership forskeptical licensee firms, and experienced licensingmanagers can amplify signals as needed to overcome the uncertainties inherentin technology commercialization. By explicitly addressing these variationsin signal strength, we develop new theory that builds on classical signalingprinciples. We test and confirm these predictions in a sample of over 950 invention-licensingcontracts. In addition to advancing signaling theory, our work has implicationsfor academic entrepreneurship, and for how experience shapes value-sharingagreements in collaborative innovations.
format text
author KOTHA, Reddi
CRAMA, Pascale
KIM, Phillip H.
author_facet KOTHA, Reddi
CRAMA, Pascale
KIM, Phillip H.
author_sort KOTHA, Reddi
title Experience and signaling value in technology licensing contract payment structures
title_short Experience and signaling value in technology licensing contract payment structures
title_full Experience and signaling value in technology licensing contract payment structures
title_fullStr Experience and signaling value in technology licensing contract payment structures
title_full_unstemmed Experience and signaling value in technology licensing contract payment structures
title_sort experience and signaling value in technology licensing contract payment structures
publisher Institutional Knowledge at Singapore Management University
publishDate 2018
url https://ink.library.smu.edu.sg/lkcsb_research/6024
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7023/viewcontent/amj.2015.1233.pdf
_version_ 1770574534666092544