Licensing and innovation: A comment

- We consider the impact of licensing on social welfare with endogenous innovation.
- We show that Chang et al. (2013) result is not correct.
- Indeed, when R&D efficiency is high social welfare is increased by licensing.

According to Chang et al. (2013), social welfare under licensing is lower than under no-licensing if the R&D efficiency is high. We show that this result is not correct, as when R&D efficiency is high social welfare is higher under licensing than under no-licensing.