University Exclusive Versus Non-Exclusive Licenses: How Does university Prestige Matter?

Abstract

This study investigates the organizational antecedents of the exclusivity of university licenses. We specifically posit that university prestige affects both the university’s ability to conduct nonexclusive licenses and the firm’s incentives for obtaining an exclusive license, thus determines the exclusivity of university licenses by shaping the joint willingness of the university and the licensee firm to license exclusively. We also examine the moderating effects of prior collaboration and geographic proximity between the university and the licensee firm. A dataset of 6,657 licensed patents owned by 118 representative Chinese universities is used to test the hypotheses. It is found that an inverted U-shaped relationship exists between university prestige and the likelihood of occurrence of exclusive license. Patents owned by universities with a relatively moderate level of prestige are more likely to be licensed exclusively than those owned by universities with a relatively high or low level of prestige. Moreover, the moderating effect of prior collaboration is supported. The turning point of the inverted U-curve shifts rightwards when the university and licensee firm established a collaborative relationship before the license. Developing a balanced framework which considers both the supply side and demand side, this study provides a deeper understanding of the resolution of the exclusive provision of university licensing contracts.