When vicarious learning rewards the originating firm

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 we apply the vicarious learning framework to analyze the learning opportunities exploited by the licensor, as a result of engaging with a particular licensee in the first place. We investigate the licensor-licensee dyads on several dimensions, capturing their profiles and the different learning opportunities exploited; we also compare dyads that invert their role in a subsequent round to dyads that do not to understand whether there are difference in terms of learning patterns. Findings offer several insights consistent with a learning scenario, thus prompting further empirical research.