Abstract
The paper analyses the correlation between the licensing activity by start-ups and established firms and the inventions’ stages of development. Using a new variable to characterise the inventions, stage of development, the paper also study the correlation between this variable and two other outcomes: patenting activity and royalty generation. The decision of firms to license at various stages of development could be affected by comparative advantage principle or by asymmetry of information. The main results show that the relative likelihood of licensing by start-ups to licensing by established firms is lower for more advanced stage inventions relative to earlier stage inventions. The results regarding the change in relative likelihood ratio across stages of development also hold when other outcome variables, like patenting and royalty creation are used.
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