Licensing or not licensing? An empirical analysis of the strategic use of patents by Japanese firms

This paper is a first attempt to analyze IP strategy of Japanese firms, by using large datasets from the Japan Patent Office's (JPO), called “Survey of Intellectual Property Activities (SIPA).” Descriptive regressions of IP strategy indicators suggest a non-linear relationship between firm size and licensing propensity. Small firms with fewer complementary assets, such as production facilities and marketing channels, tend to license more. At the same time, the licensing propensity of large firms is also high due to the effects of cross-licensing.