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Full-Text Articles in Business
Milestone Payments Or Royalties? Contract Design For R&D Licensing, Pascale Crama, Bert De Reyck, Zeger Degraeve
Milestone Payments Or Royalties? Contract Design For R&D Licensing, Pascale Crama, Bert De Reyck, Zeger Degraeve
Research Collection Lee Kong Chian School Of Business
We study how innovators can optimally design licensing contracts when there is incomplete information on the licensee's valuation of the innovation, and limited control over the licensee's development efforts. A licensing contract typically contains an up-front payment, milestone payments at successful completion of a project phase, and royalties on sales. We use principal-agent models to formulate the licensor's contracting problem, and we find that under adverse selection, the optimal contract structure changes with the licensee's valuation of the innovation. As the licensee's valuation increases, the licensor's optimal level of involvement in the development-directly or through royalties-should decrease. Only a risk-averse …
The Implications Of Debt Heterogeneity For R&D Investment And Firm Performance, Parthiban David, Jonathan P. O'Brien, Toru Yoshikawa
The Implications Of Debt Heterogeneity For R&D Investment And Firm Performance, Parthiban David, Jonathan P. O'Brien, Toru Yoshikawa
Research Collection Lee Kong Chian School Of Business
An assumption in prior research is that debt is homogeneous and provides inappropriate governance for R&D investments. We argue that debt is heterogeneous: although transactional debt does indeed impose strict contractual constraints that provide inappropriate governance for R&D investments, relational debt has very different characteristics that provide more appropriate governance. Using a sample of Japanese firms, we find that firms that align their debt structures with their R&D investments perform better than those that are misaligned. Furthermore, firms tend to align their debt structure with R&D investments, but only after deregulation permits relatively free access to various types of debt.
Technology Strategy And China's Technology Capacity Building, Arnoud De Meyer
Technology Strategy And China's Technology Capacity Building, Arnoud De Meyer
Research Collection Lee Kong Chian School Of Business
China has the potential to become a major source of innovation for the world. The scientific investment is in place and rapidly growing. But in order to reap the benefits of this investment its organisations will have to become better at managing innovation. One of the key elements of innovation management is the determination and implementation of a sound technology strategy. The purpose of this paper is to offer a framework and a detailed overview of what it entails to develop and implement a technology strategy. The paper emphasizes the alignment of the strategy with the organisational competencies and the …