What Are Some of the Ways in Which a Firm

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The Answer is A problem with licensing is the risk associated with licensing technological know-how to foreign companies.There are ways of reducing this risk.One way is by entering into a cross-licensing agreement with a foreign firm.Under a cross-licensing agreement,a firm might license some valuable intangible property to a foreign partner,but in addition to a royalty payment,the firm might also request that the foreign partner license some of its valuable know-how to the firm.Such agreements are believed to reduce the risks associated with licensing technological know-how,because the licensee realizes that if it violates the licensing contract (by using the knowledge obtained to compete directly with the licensor),the licensor can do the same to it.Cross-licensing agreements enable firms to hold each other hostage,which reduces the probability that they will behave opportunistically toward each other.Such cross-licensing agreements are increasingly common in high-technology industries.Another way of reducing the risk associated with licensing is to follow the Fuji Xerox model and link an agreement to license know-how with the formation of a joint venture in which the licensor and licensee take important equity stakes.Such an approach aligns the interests of licensor and licensee,because both have a stake in ensuring that the venture is successful.

What Are Some of the Ways in Which a Firm

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