You are not currently logged in.
Access your personal account or get JSTOR access through your library or other institution:
Preview not available
A patent holder may choose to give up its current leading position through patent licensing in order to increase its incentive to innovate further and thus avoid falling behind its rivals in future R&D races. We show that because of this "catching-up" effect, licensing may occur even when it reduces current industry profits. The overall effect of licensing is to slow down the pace of innovation, as it reduces the licensee's incentive to conduct R&D.
Review of Industrial Organization © 1997 Springer