LICENSING AS A COMMERCIALIZATION STRATEGY FOR NEW TECHNOLOGY-BASED FIRMS: AN EMPIRICAL INVESTIGATION OF NORTH-AMERICAN BASED BIOTECHNOLOGY FIRMS
Holger
Kollmer, University of Regensburg, Germany
Michael Dowling, University of Regensburg, Germany
Principal Topic
New technology-based firms often lack the financial resources and complementary assets such as large sales forces to introduce a product successfully to the market. In the case of a strong appropriability regime, contractual modes such as licensing agreements are recommended to profit from technological innovation (Teece, 1986). As a result one observes that new technology- based firms frequently rely on alliances with large corporations and out-license their intellectual property rights to exploit technological innovation.
Given the high importance of licensing as a commercialization strategy for new technology-based firms it is astonishing that there has been little empirical research on this topic. With this study we aim to bridge this gap by providing an empirical investigation of licensing as a commercialization strategy in the case of North-American based biotechnology firms.
Method
From over 1000 licensing agreements, 360 North-American bio-pharmaceutical firms were identified using the databases ReCap and BioScan. At the time of the study 245 were still independent and existing firms, but only 230 applied as new ventures. The data was collected using a combination of database research and a questionnaire survey. ReCap and Bioscan provide basic information. Additional information was collected using Compustat database and SEC filings. Specific company data and information about the licensing agreement were asked directly in a questionnaire. In a final step the information provided about the licensing agreements was reflected by press articles and company publications.
The questionnaire was returned by 77 companies, a reply rate of 33.4%. 7 questionnaires had to be skipped immediately, since they were only partially completely.
Results and Implications
We propose that there are different types of licensing strategies, partly due to determining factors, but also due to strategic choice. These findings will be of relevance for new technology-based firms helping them to optimize their licensing strategies, especially adapting theses strategies to different stages of the firm’s life cycle.
CONTACT: Holger Kollmer, University of Regensburg, Josef-Engert-Str. 9, 93053 Regensburg, Germany; (T) ++49 (0)941 943 1705; (F) ++49 (0)941 943 1707; holger.kollmer@exist-hightepp.de
2002 Babson College. All Rights Reserved. Last Updated March 2003.