Technology Resource And International Technology Exclusive Licensing Strategy

With the emergence of knowledge economy, the importance of technology licensing is increasingly prominent and it has been employed as useful strategic tools. However, as the significant part of technology licensing decision, exclusive licensing receives less attention. From theoretical perspective, the technology licensing literature overlooked the resource status of licensing firms, even the impact of the technological resource and its structure on firms’technological licensing actions. And the researches on the technological licensing strategy of developed countries also shed light on the strategy of Chinese firms who are experiencing transformation and upgrading stage.Grounded on the difference of technological resources in firms, this paper focuses on the "impact of technological resources status on exclusive licensing strategy", and looks into the influencing mechanisms along with the contextual factors on the basis of knowledge based view and international business theory. Around the research question, four sub-questions are discussed in details:(1) What’s the impact of the licensors’technological resource on exclusive licensing strategy during foreign technology licensing?(2) What’s the impact of the the technology characteristics on the relationship between licensors’technological resource and exclusive licensing?(3) What’s the impact of the location distance between licensor and licensee on the relationship between licensors’technological resource and exclusive licensing?(4) What’s the experience in host market on the relationship between licensors’ technological resource and exclusive licensing?According to theoretical review and empirical test, this paper thereby organizes four sub-studies. Firstly, this paper presents the conceptual model that integrates the effect of licensors’technological resources on exclusive licensing strategy and the contextual factors, as well as the hypotheses according to literature review. Then, the sample is set as the technology licensing agreements between foreign and Chinese firms, and finally defines529agreements. And by using hierarchical regression, the hypotheses have been tested and the conclusions have been draw.The technological resources of licensors have a negative effect on exclusive licensing. The technological depth is negatively related to exclusive licensing, while the technological breadth lays a positive effect. The technological resources could help the firm to enhance the competitive advantages, reduce the transaction cost, and improve the negotiation capabilities. The technology depth reflects the degree of path dependency of firm technology and increases the transaction cost of technology transfer, whereas the technology breadth indicates the firm capability in combinative knowledge management and improves the flexibility of exploring new knowledge and exploiting mature knowledge.The maturity of licensed technology strengthens the negative relationship between licensors’technological resources and exclusive licensing. This finding shows the mature licensed technology would exercise weak impact on licensors’ competitive advantages, with lower technology transfer cost. However, the number of licensed technology weakens the negative associations between licensors’ technological resources and exclusive licensing, but strengthens the negative relationship between technology depth and exclusive licensing, as well as reduces the positive effect of technology breadth on exclusive licensing.The cultural distance between home and host country strengthens the negative association between licensors’ technological resources and exclusive licensing. Further it strengthens the positive impact of technology depth on exclusive licensing, and enhances the positive relationship of technology breadth and exclusive licensing, whilst the regulative distance between home and host country exerts oppositely.The licensors’market experience in host country reinforces the negative relationship between licensors’technological resource and exclusive licensing, but attenuates the positive influence of technology breadth on that. Such result demonstrates the host experience could help firm improve market power and negotiation capabilities, and also reduce the technology transfer cost in host market.The abovementioned findings enhance the understanding to the mechanisms of technological resources effect on exclusive licensing. And in summary, this paper makes theoretical contribution in three-fold:Introducing the resource based view to the research of technology licensing, expanding the research boundary. Past studies have paid attention to industry organization theory (monopoly, oligopoly) and transaction cost theory (opportunity cost). However, the former theory assumes the monopolistic position of licensor’s technology while the latter doesn’t consider the impact of technology licensing on firm sustainable competitive advantages, which shows deficiencies to some extent. The current study conducts in-depth analysis based on the combined illustration of industry organization theory, transaction cost theory and resource based view, enriching the illustrating mechanisms for technology licensing actions.Broadening the research in exclusive licensing strategy. The exclusive licensing strategy attaches importance to the technology licensing. Current researches focus on the determinants of firm undertaking technology licensing, but pay less attention to the ways of licensing. In line with resource based view, the paper analyzes the influence of licensors’technological resources on exclusive licensing strategy, and considers the effect of three conditions. The findings are instructive to select reasonable ways of technology licensing.Enriching the empirical studies in technology licensing. Among the researches in technology licensing, the empirical studies are lack compared to the conceptual papers. One of the reasons is unavailable data since the technology licensing always involves trade secret. This study searches the record data in State Intellectual Property Office of China and uses the technology licensing data of foreign firms in China, which enhance the literature.