Payment schemes in learning-related international technology licensing contracts

This study tries to explore the effect of knowledge stickiness and recipient learning on payment modes of foreign technology licensing in the context of newly industrializing economies. We apply the transaction cost economics and knowledge-based perspective to examine the payment modes of international license-in. As payment modes are outcome of negotiation, we hypothesize that the choice of actual and expected payment modes are associated with knowledge tacitness, resource dependence and recipient learning capability. Based on a survey of Taiwanese 84 firms in ICT industries, we found transaction cost perspective and resource-based of knowledge view provide useful insights into the choice of licensing-in payment modes. The results suggest that the actual and expected payment modes of more proportional royalties-payment is negatively associated with tacitness but positively associated with resource dependence and recipient learning. Further implication and suggestions are offered in this paper.