Share:


Transfer pricing of innovation considering matches between innovation and technology in firms

Abstract

Firms can purchase innovation results to improve their technology. In this context, the key to transfer success is reasonably priced innovation results. Considering the match between innovation results and firm technology, this study analyzes the nonlinear improvement effect of innovation results on technology. The pricing decision is then assessed by a game model of the innovation results transfer and pricing that is based on the entire innovation process, including research and development (R&D) and transfer. Then the method for transfer pricing of innovation results is obtained from the equilibrium of game. The results show that firms tend to evaluate innovation results by matching them with their own technologies, and then make bids based on the R&D costs. Here, innovation results are obtained by firms with high-level matching. After considering the matching, the transfer pricing of innovative results will prosper the transfer market and improve the success rate of transfer. Several factors affect the possibility of transfer of innovation results and their price, including the R&D ability of the institution, the technology levels of firms, and the technological competition between firms. These conclusions were validated using a numerical example.

Keyword : transfer of innovation result, match between innovation and technology, transfer price, influencing factor, bidding game, pricing decision

How to Cite
Liu, H., Liu, X., Balezentis, T., Streimikiene, D., & Zeng, S. (2023). Transfer pricing of innovation considering matches between innovation and technology in firms. Journal of Business Economics and Management, 24(2), 274–291. https://doi.org/10.3846/jbem.2023.18852
Published in Issue
May 26, 2023
Abstract Views
479
PDF Downloads
514
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Baek, D. H., Sul, W., Hong, K. P., & Kim, H. (2007). A technology valuation model to support technology transfer negotiations. R&D Management, 37(2), 123–138. https://doi.org/10.1111/j.1467-9310.2007.00462.x

Bessen, J. (2009). Estimates of patent rents from firm market value. Research Policy, 38(10), 1604–1616. https://doi.org/10.1016/j.respol.2009.09.014

Biagioli, M. (2019). Weighing intellectual property: Can we balance the social costs and benefits of patenting? History of Science, 57(1), 140–163. https://doi.org/10.1177/0073275318797787

Carte, N. (2005). The maximum achievable profit method of patent valuation. International Journal of Innovation and Technology Management, 2(2), 135–151. https://doi.org/10.1142/S0219877005000435

Da Cruz, G., Jabur, D., & Junior, F. M. G. (2017). How much am i selling it for? Approaches and methods of patents valuation in technology transfer processes. International Business Research, 10(4), 69–76. https://doi.org/10.5539/ibr.v10n4p69

Faulkner, T. W. (1996). Applying “options thinking” to R&D valuation. Research Technology Management, 39(3), 50–56. https://doi.org/10.1080/08956308.1996.11671064

Galai, D., & Ilan, Y. (1995). Economic evaluation of remuneration from patents and technology transfers. International Review of Financial Analysis, 4(2–3), 107–121. https://doi.org/10.1016/1057-5219(95)90010-1

Grimaldi, M., & Cricelli, L. (2020). Indexes of patent value: A systematic literature review and classification. Knowledge Management Research & Practice, 18(2), 214–233. https://doi.org/10.1080/14778238.2019.1638737

Hong, S. J., Seo, J. W., Kim, Y. S., & Kang, S. H. (2010). Construction technology valuation for patent transaction. KSCE Journal of Civil Engineering, 14(2), 111–122. https://doi.org/10.1007/s12205-010-0111-y

Hsieh, C. H. (2013). Patent value assessment and commercialization strategy. Technological Forecasting & Social Change, 80(2), 307–319. https://doi.org/10.1016/j.techfore.2012.09.014

Kabulova, J., & Stankevičienė, J. (2020). Valuation of FinTech innovation based on patent applications. Sustainability, 12(23), 10158. https://doi.org/10.3390/su122310158

Lee, J., Kim, E., Sung, T. E., & Shin, K. (2018). Factors affecting pricing in patent licensing contracts in the biopharmaceutical industry. Sustainability, 10(9), 3143. https://doi.org/10.3390/su10093143

Lin, M., Li, S., & Whinston, A. B. (2011). Innovation and price competition in a two-sided market. Journal of Management Information Systems, 28(2), 171–202. https://doi.org/10.2753/MIS0742-1222280207

Liu, W., Qiao, W., & Liu, X. (2020). Discovering the realistic paths towards the realization of patent valuation from technical perspectives: Defense, implementation or transfer. Neural Computing and Applications, 33(2), 1–14. https://doi.org/10.1007/s00521-020-04964-x

Sakakibara, M. (2010). An empirical analysis of pricing in patent licensing contracts. Industrial & Corporate Change, 19(3), 927–945. https://doi.org/10.1093/icc/dtq036

Smith, G. V., & Parr, R. L. (1989). Valuation of intellectual property and intangible asset. John Wiley & Sons Inc.

Sreekumaran Nair, S. S., Mathew, M., & Nag, D. (2012). Effect of firm variables on patent price. IIMB Management Review, 24(1), 40–47. https://doi.org/10.1016/j.iimb.2011.12.004

Su, W., Chen, S., Zhang, C., & Li, K. W. (2023). A subgroup dominance-based benefit of the doubt method for addressing rank reversals: A case study of the human development index in Europe. European Journal of Operational Research, 307(3), 1299–1317. https://doi.org/10.1016/j.ejor.2022.11.030

Thoma, G. (2020). The valuation of patent-trademark pairing as IP strategy: Evidence from the USPTO. Industry and Innovation, 27(1–2), 80–104. https://doi.org/10.1080/13662716.2019.1633281

Tsai, C. F., Lu, Y. H., Hung, Y. C., & Yen, D. C. (2016). Intangible assets evaluation: The machine learning perspective. Neurocomputing, 175, 110–120. https://doi.org/10.1016/j.neucom.2015.10.041

Tukoff-Guimarães, Y. B., Kniess, C. T., Penha, R., & Ruiz, M. S. (2021). Patents valuation in core innovation: Case study of a Brazilian public university. Innovation & Management Review, 18(1), 34–50. https://doi.org/10.1108/INMR-03-2019-0027

Vimalnath, P., Gurtoo, A., & Mathew, M. (2017). The relationship between patent age and selling price across bundling strategies for United States patents, predominately for computer and communication technology. World Patent Information, 48, 1–11. https://doi.org/10.1016/j.wpi.2016.12.001

Wu, M. C., & Tseng, C. Y. (2006). Valuation of patent – a real options perspective. Applied Economics Letters, 13(5), 313–318. https://doi.org/10.1080/13504850500393477

Yagi, M., & Managi, S. (2018). Shadow price of patent stock as knowledge stock: Time and country heterogeneity. Economic Analysis and Policy, 60, 43–61. https://doi.org/10.1016/j.eap.2018.09.001

Yun, D., Park, I., & Yoon, B. (2016). Development of a technology valuation method for buyers in technology transfer. Journal of the Korea Academia-Industrial Cooperation Society, 17(11), 155–167. https://doi.org/10.5762/KAIS.2016.17.11.155

Zeng, S. Z., Zhou, J. M., Zhang, C. H., & Merigó, J. M. (2022). Intuitionistic fuzzy social network hybrid MCDM model for an assessment of digital reforms of manufacturing industry in China. Technological Forecasting & Social Change, 176, 121435. https://doi.org/10.1016/j.techfore.2021.121435