Strategic timing of academic commercialism: evidence from technology transfer

While the markets for technology have received considerable attention because of the contribution to management and economy, universities and government research institutes have risen as important providers of technology. Their early licensing agreements may contribute to enhancing the licensor’s productivity, the licensee’s competency, and the efficiency of national innovation system. However, later licensing agreements enhance the licensor’s bargaining power. Thus, the timing of licensing is not only a policy consideration at the national level but also a key strategic consideration at the R&D entity level. We first theoretically claim that the ability to “invent around” determines the impact of uncertainty attenuation on the timing of licensing on the condition of market friction. Based on this claim, the paper argues that technology transfers from public research organizations differ from inter-firm licensing transactions in regard to their timing patterns. Using the data of commercialization activity through national R&D programs in South Korea, we empirically find that resolving uncertainties rather delays the licensing time for technology transfers, as opposed to inter-firm transactions. In addition, our findings provide evidence of frictions related to search costs associated with the unique nature of R&D processes in public research organizations.