Are there real effects of licensing on academic research? A life cycle view

Do financial returns to licensing divert faculty from basic research? In a life cycle model in which faculty can conduct basic and/or applied research (the latter can be licensed) licensing increases applied relative to basic effort. However, leisure falls so basic research need not suffer. If applied effort also leads to publishable output, then research output and stock of knowledge are higher with licensing than without. In a tenure system licensing has a positive effect on research output unless license incentives are high. Overall results suggest a positive impact of tenure on research output over the life cycle. (c) 2007 Elsevier B.V. All rights reserved.