When vicarious learning rewards the originating firm: Exploring the learning opportunities available to the licensor

Why should companies engage in licensing-out? While the conventional wisdom mostly focuses on the financial and commercial benefits available to the licensor, this paper points to the learning opportunities the licensor (the originator) can seize through selling its knowledge to other firms (the recipients). We develop an exploratory study and analyze a dataset of 245 licensing agreements. We identified all cases in which the initial licensor licensed back a technology from its initial licensee in a second round; we suggest this is the result of the vicarious learning opportunities exploited by the licensees in the first round. Findings show mixed results, thus setting the stage for future research development.