Effects of incorporating public innovation intermediaries on technology transfer performance: evidence from patent licensing of Japan’s Kohsetsushi

Abstract

The incorporation of public organizations is meant to improve their efficiency and contribution to national and local economies. In Japan, incorporation has been implemented at the national and local levels since the late 1990s. This process alters the incentive system comprising intellectual property (IP) ownership, managerial freedom, and rent sharing, which promotes IP commercialization. This study assesses the economic consequences of the incentive system reform, taking the example of a public innovation intermediary, Kohsetsushi. Unlike the incorporation of national universities, the incorporation of Kohsetsushi is at the discretion of local governments. Therefore, there should be a comparative advantage for both incorporated and unincorporated Kohsetsushi. A dataset representative of both types of Kohsetsushi was established to estimate the average treatment effects on the treated (ATT), identify the type of selection into incorporation, and discuss the economic consequences of endogenous selection by local governments. The counterfactual analysis of licensing income revealed a negative ATT of incorporation and negative selection into not choosing incorporation. Incorporated Kohsetsushi would have had higher licensing income had they not been incorporated. The evidence does not support comparative advantage. The unintended consequence might have been caused by the lack of harmonization between the incentive and evaluation systems.