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Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: IP-for-IP or Cash-for-IP? R&D Competition and the Market for Technology
Author(s): Herbst, Patrick
Jahn, Eric
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Keywords: Intellectual property
R&D competition
Technology trade
Issue Date: Aug-2017
Citation: Herbst P & Jahn E (2017) IP-for-IP or Cash-for-IP? R&D Competition and the Market for Technology, Review of Industrial Organization, 51 (1), pp. 75-101.
Abstract: We analyze how firms might benefit from trading restrictions in the market for technology. We show that restricting trade to reciprocal exchange (“IP-for-IP” barter instead of cash transactions), as in cross-licensing agreements, alters the allocation of R&D resources and reduces overinvestment in R&D. The tighter are the trading restrictions, the higher are the costs that are due to forgone gains from trade. Our analysis of the trade-offs involved shows that firms benefit from IP-for-IP restrictions, compared to both free trade and no trade environments, in industries where: (1) firms differ in their capabilities to commercialize IP; and (2) patent complementarities exist.
DOI Link: 10.1007/s11151-016-9542-z
Rights: © The Author(s) 2016 This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (, which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

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