When Vicarious Learning Rewards the Originating Firm: Exploring Learning Opportunities Available to the Licensor

Why should companies engage in licensing-out? While conventional wisdom mostly focuses on the financial and commercial benefits available to the licensor, this paper points to the learning opportunities entailed in licensing agreements. We develop an exploratory study built around a longitudinal cross-industry database of 558 licensing deals and analyze the vicarious learning opportunities exploited by the licensor, as a result of engaging with the licensee in the first place. We compare the licensor-licensee dyads on several dimensions, capturing their profiles, the learning opportunities exploited, their patent strategies and citation patterns. Findings are consistent with a learning scenario, thus prompting further empirical research.