How Licensing Resolves Hold-Up: Evidence from a Dynamic Panel Data Model with Unobserved Heterogeneity

This paper is a study of licensing in a patent thicket. In a patent thicket licensing allows firms to avoid hold-up. It will have different effects on firms R&D incentives depending on whether firms license existing or future patents. The authors find that firms relationships in product markets and technology space jointly determine the type of licensing contract chosen.