Licensing of university inventions: The role of a technology transfer office

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We develop a theoretical model to explain the specific role of Technology Transfer Offices (TTOs) in licensing university inventions. Using a framework where firms have incomplete information on the quality of inventions, we develop a reputation argument for the TTO to reduce the asymmetric information problem. Our results indicate that a TTO is often able to benefit from its capacity to pool innovations across research units (and to build a reputation) within universities. We identify when the technology seller will have an incentive to "shelve" some of the projects, thus raising the buyer's beliefs on expected quality; this results in fewer but more valuable innovations being sold at higher prices. We explain the importance of a critical size for the TTO to be successful as well as the stylized fact that TTOs may lead to fewer licensing agreements but higher income from innovation transfers. © 2006 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)483-510
JournalInternational Journal of Industrial Organization
Publication statusPublished - 1 Jun 2007


  • Industry-science relations
  • Technology licensing
  • Technology transfer offices


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