Markets for Technology

The paper explores the economic role electronic commerce will play in the evolving economic conditions of the next decade. It does so by developing the concepts of 'first order EC' and 'second order EC' distinguishing traditional trade supported by electronic devices and trade of this support itself. In chapter 1 this idea is introduced with the use of standard concepts of economic theory. Building on this analytical distinction, chapter 2 adds the concept of 'global players', which we think will be crucial for a realistic picture of economic dynamics of the next century. Large companies, national governments and groups of consumers are examples for global players. Again we lend ideas from economic theory to model their characteristics. Finally, in chapter 3, we show how market processes and political/economic processes (e.g. exchange rate developments) initiated by these global players might combine to encompass electronic commerce in a mid-term perspective. A concluding chapter highlights the advantages and shortcomings of the presented framework.

Firms have been modifying their innovation management processes to generate, implement and exploit new technological knowledge. A gradual shift from a closed to an open model of innovation has been the recurring pattern of this change. Firms have to revise their overall strategic orientation to adapt their managerial procedures according to the Open Innovation (OI) paradigm. The New Service-Dominant (S-D) Logic can offer a useful guideline to firms in the implementation of an OI model. This paper presents the bases of the OI paradigm by means of the S-D Logic mindset. For each of the premises characterizing the S-D Logic, instances of firms that have implicitly adopted the OI paradigm are provided. We discuss how the S-D Logic can be put in practice within the context of the OI model

This paper analyzes the relationship between technology licensing and the effectiveness of patent protection. Using the 1994 Carnegie Mellon survey on industrial research and development (R&D) in the United States, we develop and test a simple structural model in which the patenting and licensing decisions are jointly determined. We find that increases in the effectiveness of patent protection increases licensing propensity, but only when the firm lacks specialized complementary assets required to commercialize new technologies. In contrast, for firms with specialized complementary assets, increases in patent effectiveness increase patenting propensity but reduce the propensity to license. We present systematic cross-industry empirical support for the proposition that intellectual property protection is a key determinant of the vertical boundaries of the firm and the market for technology but that its impact is mediated by a firm’s ownership of specialized complementary assets.

The paper conceptualizes unfair competition on the market for technology of interwar Czechoslovakia, i.e. imitation strategies, as a research topic of economic history and business history. The aim is to defi ne the basic concepts and outline the Neo-Schumpeterian theory of technological regimes as an eff ective interpretative tool for introducing imitation strategies into the broader context of innovative activities in the business environment. Special attention is paid to research questions and sources that an economic historian can apply in the study of this topic.

General Condition of Technology Markets in China Case Studies Time Division-Synchronous Code Division Multiple Access (TD-SCDMA) viii Wireless Authentication and Privacy Infrastructure (WAPI) 180 Intelligent Grouping and Resource Sharing (IGRS) 185 Audio-Video Standard (AVS) 190 Conclusion 196 5 CONCLUSION 198 Bringing it Together: the Cases of Japan and Korea 199

This paper reviews and compares patent pools, intellectual property clearinghouses and copyright collectives as systems for promoting efficient access to licensable intellectual property in a 'market for technology' (Arora et al, 2001). These systems promote downstream use of innovations by economizing on search and transaction costs in licensing, as well as potentially mitigating the conditions that lead to the 'tragedy of the anti-commons' and other coordination problems in multilateral licensing. We compare and classify different systems in terms of their features, review some existing systems, and discuss their economic characteristics.

We investigate the determinants of the governance structure for a sample of successful collaborative inventive activities. We find that firm size and incoming spillovers have a positive impact on the probability to collaborate. We then extend the analysis to four possible modes of governance: coassignment, co-invention, formal agreement, and informal agreement. We find that higher project complexity and technological scope are associated to tighter modes of governance while licensing to less hierarchical ones. Inventor specific characteristics matter too. In particular, experience increases the probability of choosing less hierarchical governance modes while better education is associated to tighter modes.

More often than not, economic literature considers Technology Licensing Agreements (TLA) as a homogenous ensemble of contractual arrangements within the category of market agreements distinct from to hybrid forms (alliances and joint ventures) and vertical integration. It then focuses on the determinants of the "price" of technology by examining payment schemes, and on the effects these agreements have on competitiveness. This view tends to neglect the fact that transactions dealing with knowledge vary strongly according to industries and countries because knowledge does not always present the same transfer and protection difficulties through the formal institutional framework. This results in a great variety of TLAs which in reality cover a very wide spectrum of governance structures. It is important to take these elements into account in order to reassess the impact of theoretical contributions and to analyze public policies, notably when they affect intellectual property law and competition law.

This paper addresses the commercialisation decisions of research-based spin-off firms (RBSOs), focusing on the case of companies specialising in the production and sale of intellectual property-a model of entrepreneurial behaviour increasingly frequent in science-based fields and that researchbased spin-offs may be more prone to adopt, given their specific characteristics. Combining insights from the economics of technological change and the strategic management of technology literature, we discuss the conditions that can influence firms' ability to operate in the market for technology, and advance some theory-driven hypotheses regarding key factors that are likely to determine it-nature of knowledge being exploited, appropriability conditions, location and degree of control upon complementary assets and institutional setting of origin-as well as their impact upon firms' decisions. These hypotheses are tested on a group of 80 European RBSOs, using data collected specifically for this purpose, on the basis of questionnaire-based interviews. This research adds to recent work on the determinants of the commercialisation strategy of technology-based SMEs, but by focusing on a particular group of companies-the RBSOs-we also take into consideration some distinctive characteristics of this group, which introduce some specificity in their innovative behaviour.

The NASA/Florida Minority Institution Entrepreneurial Partnership (FMIEP) represents a new infrastructure for technology transfer based on an alliance between the National Aeronautics and Space Administration (NASA)-Kennedy Space Center (KSC), the Technological Research and Development Authority (TRDA), and four Minority Institutions in the State of Florida. This paper describes this partnership, their key activities, and some of the initial results accomplished.

There is a large body of research and development into the low emission energy technologies that has the potential to assist developed and developing countries transition to more sustainable energy systems. It has long been recognised that public perceptions can have a fundamental effect on the market for technology and this issue raises questions about the role society will play in developing a low emissions energy future. Understanding how the public will respond to the range of low emission energy technologies as part of a climate change mitigation package is therefore critical for researchers, policy makers and industry stakeholders. In the current research, we investigated the Australian public's likely acceptance of a range of low emission energy technologies by assessing the diverse 'orientations' that have emerged in response to low emission energy technologies. In a survey of two Australian states we measured the support for, and knowledge of, a range of low emission energy technologies. Using self-organising maps, a relatively new approach for segmenting response profiles, we identified that at least four distinct 'orientations' have emerged toward the issue and are characterising the likely acceptance of these technologies: 'Disengaged', 'Nuclear Oriented', 'Renewables Oriented', and 'Engaged'. The implications of these multiple public viewpoints are described for climate change mitigation policy and for future research into the social acceptance of alternative energy technologies.

According to Gans & Stern (1999), firms engage in R&D spending, in part, in order to improve their bargaining position as buyers in the market for technology. We test this theory empirically with data from the pharmaceutical industry. We develop and estimate a structural model of R&D spending and licensing. We find that R&D spending does improve the bargaining position of licensees; although, the effect is small. In the absence of the bargaining power effect, spending on R&D would be about 6% lower than it is. We also find that entry of technology licensors reduces firms' own R&D but has a positive overall effect on innovation.

Purpose-The authors attempt to answer the basic questions: How is imitation tied to innovation? This question is addressed in the context of China's innovation system in the 2000s where Chinese industrial firms simultaneously implement innovation and imitation strategies in their new product developments. Design/methodology/approach-The authors first build on lattice theory and supermodularity theory to provide a rigorous and careful mathematical proof. The authors further conduct the empirical analyses using an original data on Chinese manufacturing firms' innovation and imitation strategies in the development of new products in 2002. Findings-This article reveals the complementarity relation between imitation and innovation strategies and identifies external knowledge search as the boundary condition that influences the extent to which two strategies reinforce each other. Research limitations/implications-The findings of the imitation-innovation complementarity suggest that imitation is not only an indispensable strategy independent of innovation, but also is vital to the effectiveness of innovation itself. Practical implications-The imitation-innovation complementarity finding provides some evidence for the contention that Chinese latecomers exploit the synergies of imitation and innovation, transforming themselves from imitators to innovators and vibrant competitors in the global market (Wu et al., 2016) and, as a result, national innovation system has evolved from a state-sponsored imitation program to the imitation-innovation mixture. Originality/value-In contrast to earlier innovation studies in which innovation and imitation are unrelated, this study reveals that imitation complements innovation, and the extent of Chinese firms' external knowledge search affects the complementary relationship between imitation and innovation. These findings add important insights to the innovation management literature and contribute empirical evidence to the interplay of innovation and imitation enhancing national innovation system.

We examine the appropriability problem of an inventor who brings to the market a successful innovation that can be legally copied. We study this problem in a dynamic model in which imitators can "enter" the market either by copying the invention at a cost or by buying knowledge (a license) from the inventor. The …rst imitator to enter the market can then resell his acquired knowledge to the remaining imitators. This dynamic interaction in the licensing market dramatically a¤ects the conventional wisdom on the need for intellectual property rights. Our main result reveals that, in equilibrium, imitators delay their entry into the market and thus the inventor retains monopoly rents for some time. Second, we show that the innovator strictly prefers to o¤er non-exclusive rather than exclusive licenses which would forbid reselling by the imitators. Last, we prove that when the innovator faces a large number of imitators, her equilibrium reward converges to monopoly pro…ts.

In the defence industry the recent development of a 'market for technology', the creation of new European high-technology companies as well as transformations in government agencies have driven firms to reposition their technological and organizational skills. Our objective is to show that the transformations that have occurred in the past ten years have not only redefined skills and the organization of production, but also have given a more strategic place to knowledge management (KM) practices. We provide a contextual and historical overview based on qualitative interviews, in order to better understand the relation between KM and innovative behaviour in this industry. We build an original industrial and technological database comprising various samples that provides quantitative information concerning KM and innovative practices. The results of the statistical analysis reveal the specificity of firms in this industry. Taking account of the size of these firms and their technological intensity, we show that the behaviour of defence industry firms in terms of KM practices, differs from that of other firms. This is evident from their technological performance, and innovation and patenting intensity. This structural tendency is explained as an innovative behaviour in the French national innovation system rather than merely a 'trend'.

This paper addresses the commercialisation decisions of research-based spin-off firms (RBSOs), focusing on the case of companies specialising in the production and sale of intellectual property-a model of entrepreneurial behaviour increasingly frequent in science-based fields and that researchbased spin-offs may be more prone to adopt, given their specific characteristics. Combining insights from the economics of technological change and the strategic management of technology literature, we discuss the conditions that can influence firms' ability to operate in the market for technology, and advance some theory-driven hypotheses regarding key factors that are likely to determine it-nature of knowledge being exploited, appropriability conditions, location and degree of control upon complementary assets and institutional setting of origin-as well as their impact upon firms' decisions. These hypotheses are tested on a group of 80 European RBSOs, using data collected specifically for this purpose, on the basis of questionnaire-based interviews. This research adds to recent work on the determinants of the commercialisation strategy of technology-based SMEs, but by focusing on a particular group of companies-the RBSOs-we also take into consideration some distinctive characteristics of this group, which introduce some specificity in their innovative behaviour.

Patent trolls-firms that appropriate profits from innovation by enforcing patents against infringers-are peculiar players on markets for technologies. As buyers of patents, they are solely interested in the exclusion right, not in the underlying knowledge. Similarly, when they sell or license out patents, the transaction does not involve a technology transfer. In this paper, we empirically analyze trolls' patent acquisitions. We draw on a unique dataset of 753 patents acquired by known patent trolls, which we compare to 1506 patents acquired by practicing firms. Our findings regarding patent characteristics support recent theoretical propositions about the troll business model. Trolls focus on patents that have a broad scope and that lie in patent thickets. Furthermore, and contrary to common belief, we find that troll patents are of significantly higher quality than those in the control group, a result that suggests sustainability of the troll business in the future. Extrapolating from our findings, we posit that transactions involving patent trolls may only be the tip of the iceberg of "patent-only" transactions, a conjecture with strong implications for the efficiency of markets for technologies. Managerial and policy implications are discussed.

The NASA/Florida Minority Institution Entrepreneurial Partnership (FMIEP) represents a new infrastructure for technology transfer based on an alliance between the National Aeronautics and Space Administration (NASA)-Kennedy Space Center (KSC), the Technological Research and Development Authority (TRDA), and four Minority Institutions in the State of Florida. This paper describes this partnership, their key activities, and some of the initial results accomplished.

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

New entrants to a market tend to be superior to incumbents in originating radical innovations. We provide a new explanation for this phenomenon, based on markets for technology. It applies in industries where successful entrepreneurial firms, or their technologies, are acquired by incumbents that then commercialize the innovation. To this end we analyze an innovation game between one incumbent and a large number of entrants. In the first stage, firms compete to develop innovations of high quality. They do so by choosing, at equal cost, the success probability of their R&D approach, where a lower probability accompanies higher value in case of success-that is, a more radical innovation. In the second stage, successful entrants bid to be acquired by the incumbent. We assume that entrants cannot survive on their own, so being acquired amounts to a prize in a contest. We identify an equilibrium in which the incumbent performs the least radical project. Entrants pick pairwise different projects; the bigger the number of entrants, the more radical the most radical project. Generally, entrants tend to choose more radical R&D approaches and generate the highest value innovation in case of success. We illustrate our theoretical findings by a qualitative empirical study of the Electronic Design Automation industry, and derive implications for research and management.

According to Gans & Stern (1999), firms engage in R&D spending, in part, in order to improve their bargaining position as buyers in the market for technology. We test this theory empirically with data from the pharmaceutical industry. We develop and estimate a structural model of R&D spending and licensing. We find that R&D spending does improve the bargaining position of licensees; although, the effect is small. In the absence of the bargaining power effect, spending on R&D would be about 6% lower than it is. We also find that entry of technology licensors reduces firms' own R&D but has a positive overall effect on innovation.

Existing game-theoretic models of divisionalization and franchising treat each firm's number of competing units as a continuous variable. We account for the integer constraint on divisions, and show that the continuous case reasonably approximates the equilibria of the discrete game.

This article presents a spiral process model of indigenous technological innovation capabilities (ITICs) that shows how firms in a developing country initiate, imitate, improve and make innovative technologies. Any technological innovation passes through four stages: (1) technological innovation (TI), (2) transfer of technology (imitation), (3) adaptive technological innovation (improvement), and finally (4) indigenous technological innovation (local innovation). This paper reviews models and frameworks related to technological innovation capabilities (TICs) which are proposed in the context of developing countries. It then analyzes the Late-Starter, Samsung Electronics as a case in point to illustrate how Korean firms have built their ITICs. The model shows four developmental stages at Samsung Electronics as: (a) Entrance of foreign companies into the Korean market and their refusal to transfer their technologies to Samsung initiating its ITICs, (b) Samsung started TICs by means of...

This paper reviews and compares patent pools, intellectual property clearinghouses and copyright collectives as systems for promoting efficient access to licensable intellectual property in a 'market for technology' (Arora et al, 2001). These systems promote downstream use of innovations by economizing on search and transaction costs in licensing, as well as potentially mitigating the conditions that lead to the 'tragedy of the anti-commons' and other coordination problems in multilateral licensing. We compare and classify different systems in terms of their features, review some existing systems, and discuss their economic characteristics.

The development of markets for technology has eased the acquisition of technology and reshaped the innovation strategies of firms that we classify as producers of innovations or as imitators. Innovative activities of firms include research, acquisition of technology and downstream activities. Within an industry, firms producing innovations tend to conduct more research and downstream activities than those imitating innovations. Acquisition of technology is equally important for both. To implement innovation strategies, firms producing innovations require both the capability to scan the external environment for technology and the capability to integrate new technology. Firms producing innovations require both, while firms imitating innovations require scan capabilities only.

More often than not, economic literature considers Technology Licensing Agreements (TLA) as a homogenous ensemble of contractual arrangements within the category of market agreements distinct from to hybrid forms (alliances and joint ventures) and vertical integration. It then focuses on the determinants of the “price” of technology by examining payment schemes, and on the effects these agreements have on competitiveness. This view tends to neglect the fact that transactions dealing with knowledge vary strongly according to industries and countries because knowledge does not always present the same transfer and protection difficulties through the formal institutional framework. This results in a great variety of TLAs which in reality cover a very wide spectrum of governance structures. It is important to take these elements into account in order to reassess the impact of theoretical contributions and to analyze public policies, notably when they affect intellectual property law and ...

The development of markets for technology has eased the acquisition of technology and reshaped the innovation strategies of firms that we classify as producers of innovations or as imitators. Innovative activities of firms include research, acquisition of technology and downstream activities. Within an industry, firms producing innovations tend to conduct more research and downstream activities than those imitating innovations. Acquisition of technology is equally important for both. To implement innovation strategies, firms producing innovations require both the capability to scan the external environment for technology and the capability to integrate new technology. Firms producing innovations require both, while firms imitating innovations require scan capabilities only.

The development of markets for technology has eased the acquisition of technology and reshaped the innovation strategies of firms that we classify as producers of innovations or as imitators. Innovative activities of firms include research, acquisition of technology and downstream activities. Within an industry, firms producing innovations tend to conduct more research and downstream activities than those imitating innovations. Acquisition of technology is equally important for both. To implement innovation strategies, firms producing innovations require both the capability to scan the external environment for technology and the capability to integrate new technology. Firms producing innovations require both, while firms imitating innovations require scan capabilities only.

The aim of this paper is to provide a comprehensive analysis of a part of contractual obligations of the licensor of know-how and their regulation in the Macedonian legislation. Special emphasis will be placed on two obligations that contracting parties inevitably incorporate into their agreement: the licensor's obligation to transfer the know-how and to give the necessary instructions and information for its successful utilization, and the licensor's obligation to guarantee the material and legal properties of know-how. Thus, this paper is divided into two systematic sections, focusing on each of these obligations respectively and examining the solutions contained in the Macedonian Obligation Relations Act that are applicable in the regulation of these contractual obligations.

We investigate the determinants of the governance structure for a sample of successful collaborative inventive activities. We find that firm size and incoming spillovers have a positive impact on the probability to collaborate. We then extend the analysis to four possible ...

By using the PatVal-EU dataset we find that the most important determinant of patent licensing is firm size. Patent breadth, value, protection, and other factors suggested by the literature also have an impact, but not as important. In addition, most of these factors affect the willingness to license, but not whether a license actually takes place. We discuss why this suggests that there are transaction costs in the markets for technology. The issue is important because many potential licenses are not licensed suggesting that the markets for technology can be larger, with implied economic benefits.

More often than not, economic literature considers Technology Licensing Agreements (TLA) as a homogenous ensemble of contractual arrangements within the category of market agreements distinct from to hybrid forms (alliances and joint ventures) and vertical integration. It then focuses on the determinants of the "price" of technology by examining payment schemes, and on the effects these agreements have on competitiveness. This view tends to neglect the fact that transactions dealing with knowledge vary strongly according to industries and countries because knowledge does not always present the same transfer and protection difficulties through the formal institutional framework. This results in a great variety of TLAs which in reality cover a very wide spectrum of governance structures. It is important to take these elements into account in order to reassess the impact of theoretical contributions and to analyze public policies, notably when they affect intellectual property law and competition law.

This essay explores the nature, the functioning, and the economic and policy implications of markets for technology. Today, the outsourcing of research and development activities is more common than in the past, and specialized technology suppliers have emerged in many industries. In a sense, the Schumpeterian vision of integrating R&D with manufacturing and distribution is being confronted by the older Smithian vision of division of labor. The existence and efficacy of markets for technology can profoundly influence the creation and diffusion of new knowledge, and hence, economic growth of countries and the competitive position of companies. The economic and managerial literatures have touched upon some aspects of the nature of these markets. However, a thorough understanding of how markets for technology work is still lacking. In this essay we address two main questions. First, what are the factors that enable a market for technology to exist and function effectively? Specifically we look at the role of industry structure, the nature of knowledge, and intellectual property rights and related institutions. Second, we ask what the implications of such markets are for the boundaries of the firm, the specialization and division of labor in the economy, industry structure, and economic growth. We build on this discussion to develop the implications of our work for public policy and corporate strategy.

This paper explored an unusually comprehensive dataset of more than 2,000 drug R&D projects all over the world during the 1990s. This enabled us to characterise several features of the innovation process in pharmaceuticals, particularly the different role and comparative R&D performance of the large established drug companies vis-à-vis smaller high-tech specialist firms  the so-called New Biotechnology Firms (NBFs). Our results can be summarised as follows: a) The NBFs are largely an American phenomenon. More than half of the drug R&D projects originated in the US are by NBFs, while almost 90% of the drug R&D projects originated in Europe are from established pharmaceutical firms; b) Collaborative R&D projects are consistently more likely to occur in the US than in Europe. However, in-house projects are a significant majority of the drug R&D projects that entered the clinical stages. c) The established pharmaceutical companies have comparative advantages with respect to the NBFs in drug development (clinical trials). In drug discovery there is no advantage related to scale. Unlike clinical developments, where the large firms seem to have superior capabilities when compared to the NBFs, in discovery there is no inherent superiority (in terms of ultimate probability of success of the compounds) of either the NBFs or the large firms. d) The NBFs are not specialized in more risky R&D projects. In fact, more risky drug projects (i.e. drugs for which there is no or there are few existing remedies) are more likely to be undertaken by the larger pharmaceutical companies. This suggests that scale, market power, and the ability to moblise large amounts of resources are key factors in enabling the firms to sustain such higher risks. e) Other things being equal, the projects originated by the NBFs are more likely to fail in the earlier clinical stages. This suggests that the NBFs perform a good deal of exploration without incurring the higher costs of failing at later stages.

A firm wishing to protect its intellectual property from imitation has diffe rent options, notably patents, first mover advantage, lead time and secrecy. Although patents are often thought to be less effective at enabling the inventor to benefit from the innovation than other alternatives (Levin et al., 1987 ; Cohen et al., 1996), they have an important socially valuable feature that the alternatives lack. Specifically, patents can be used to sell technology, typically through licensing contracts. REVUE D'ÉCONOMIE INDUSTRIELLE-n° 92, 2e et 3e trimestres 2000 REVUE D'ÉCONOMIE INDUSTRlELLE-n° 92, 2 e et 3" trimestres 2000

The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

This paper empirical1y analyzes the determinants of the choice between whol1y owned subsidiary and technology licensing as a strategy for expansion abroad. We use a new and comprehensive database on worldwide plant level investments in the chemical industry during the 1981-1991 periodo We find that both cultural distance and the presence

In technology-based industries, incumbent firm often license their technology to potential competitors. Such a strategy is difficul to explain within traditional models of licensing. This paper extends the literature on licensing by relaxing the assumption of a monopolist technology holder. Competition in the market for technology induces licensing of innovations and incumbent firm may fin it privately profitabl to license although their joint profit may well be higher in the absence of any licensing. A strong testable implication of our model is that the number of licenses per patent holder decreases with the degree of product differentiation.

Email: gambardellaȰsssup.it All three have published in leading economics and management journals, and together were co-authors of Markets for Technology: The Economics of Innovation and Corporate Strategy (2001). Arora also co-edited Chemicals and Long Term Economic Growth. Gambardella also authored of Science and Innovation (1995), and co-edited The Organization of the Innovative Activity in Europe,

Although market transactions for technologies, ideas, knowledge or information are limited by several well-known imperfections, there is evidence that they have become more common than in the past. In this paper we analyze how the presence of markets for technology conditions the technology and corporate strategy of firms. The first and most obvious implication is that markets for technology increase the strategy space: firms can choose to license in the technology instead of developing it in-house or they can choose to license out their technology instead of (or in addition to) investing in the downstream assets needed to manufacture and commercialize the goods. The implications for management include more proactive management of intellectual property, greater attention to external monitoring of technologies, and organizational changes to support technology licensing, joint-ventures and acquisition of external technology. For entrepreneurial startups, markets for technology make a focused business model more attractive. At the industry level, markets for technology may lower barriers to entry and increase competition, with important implications for the firms' broader strategy as well. 1 This sharp distinction between markets and organizations which is made primarily for expository reasons is not completely faithful to history. Indeed, Chandler (1990) provides several examples of firms that within the in-house R&D paradigm have relied on external sources of knowledge. A classic reference is the reliance of DuPont on external technology until the 1930s (Hounshell and Smith, 1988). There are also important differences across sectors and countries. For instance, during the 1950s and the 1960s Japanese firms in the machinery construction and chemical industries were heavily licensing technologies, mainly from the USA (Chandler, 1990). 2 Elsewhere (see Arora et al., 2001a) we study the nature and functioning of markets for technology and the factors which limit or encourage their growth (see also Pavitt, 2000). We also discuss in detail how the actions of firms, particularly early in their history, have affected the evolution of markets for technology. Sometimes companies have helped, possibly not intentionally, to develop markets for technology. For instance, this is the case of oil companies that, with their early reliance on external technological services and refining technology, have promoted the rise of specialized suppliers (Arora and Gambardella, 1998). In other industries regulation and antitrust policy have played a major role, as for instance in technology licensing by AT&T and IBM (Grindley and Teece, 1997). Although we acknowledge the importance of these issues, the scope of the present paper is already too broad to analyze them here.

This paper examines the growth of technological capability in the telecommunication industry in China. We apply a modified version of Lee and Lim's [Lee, K., Lim, C., 2001. The technological regimes, catch-up and leapfrogging: findings from the Korean industries. Research Policy, vol. 30.] model of technological learning and catching-up. Using the three cases of the Shanghai Bell, the CIT-led R&D consortium, and indigenous companies such as Huawei, we analyze how the catching-up in the telecommunication industry occurred. We find that the important factors in the catch-up are the strategy of "trading market for technology," the knowledge diffusion from Shanghai Bell both to the R&D consortium and to Huawei, and industrial promotion by the government. As a condition for successful catch-up, the paper points out that the technological regime of the telephone switches is featured by a more predictable technological trajectory and a lower cumulativeness. These conditions and strategies helped the Chinese firms to achieve a stage-skipping catch-up, namely, by skipping the stage of analogue electronic switches to jump to digital electronic switches.

We investigate the determinants of the governance structure for a sample of successful collaborative inventive activities. We find that firm size and incoming spillovers have a positive impact on the probability to collaborate. We then extend the analysis to four possible ...