On the survival of contracts: assessing the stability of technology licensing agreements in the Brazilian seed industry [An article from: Journal of Economic Behavior and Organization]

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Description:
The present study focuses on contract duration as defined ex post, meaning that the ''survival'' of contractual relationships is observed over time. Our empirical study employs hazard rate models with time-varying covariates, using data from technology licensing contracts between seed companies and a governmental R&D organization in Brazil, EMBRAPA. We find evidence that rates of contract termination (1) decrease with the level of quasi-rents available in the relationship; (2) decrease as a function of past satisfactory outcomes; (3) increase with the extent of disturbances affecting the technology's demand; and, other things being equal, (4) increase (rather than decrease) over time.