Equity Links and Information Acquisition in Biotechnology Alliances

We use a simple model of collaborative innovation to structure an empirical analysis of minority equity links in biotechnology alliances between clients and R&D firms. In the model, an equity link is an investment in information acquisition: it improves the ability of the client to learn about the R&D firm’s ability and the alliance project’s quality. The model generates several testable hypotheses about how the R&D firm’s project characteristics and previous alliances affect the use of equity links in new alliances. We test the hypotheses using a large data set of biotechnology alliances and find empirical support.alliance; collaboration; integration; joint venture; technological change

MARKET STRUCTURE IN BIOTECHNOLOGY: IMPLICATIONS FOR LONG-RUN COMPARATIVE ADVANTAGE

A country specializing in a high technology industry may find that excess returns stemming from innovation are reallocated overseas as foreign-based multinationals access ongoing domestic R&D through alliances with or acquisition of established domestic start-ups. Computer simulation illustrates this process in the context of the current US specialization in biotechnology. Keywords: Biotechnology, market structure, comparative advantageBiotechnology, market structure, comparative advantage, Research and Development/Tech Change/Emerging Technologies,

The Biotechnology Sector: "Bounds" to Market Structure

This paper examines whether it makes sense to consider Sutton's "bounds" approach as a candidate theory for explaining the recent evolution of market structure in the biotechnology sector, and to speculate whether market structure will change if the industry begins to introduce second-generation GM products that are of more direct benefit to consumers. A key result is that the market structure is bounded in the presence of endogenous sunk costs, implying care should be taken when inferring any correlation between R&D expenditure and seller concentration in the biotechnology sector.Biotechnology, market structure, Research and Development/Tech Change/Emerging Technologies, L1, L11,

Impact of Biotechnology on Plant Breeding

The application of modern biotechnology to plant breeding is considered to be more efficient and quicker than conventional breeding techniques in the development of new and more resilient crop varieties. To test the impact that biotechnology is having on a industrial plant breeding activities, we relate firm level Plant Variety Protection Certificate (PVPC) applications to corresponding expenditure on research and development (R&D), agricultural biotechnology patents applications, field trials of genetically modified crops, firm structure, as well as industry specific characteristics. Regression results indicate agbiotech activities are directly related to PVP applications, hence the creation of new plant varieties.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

Does New Zealand have an innovation system for biotechnology?

While there is a large and growing international literature on economic aspects of biotechnology innovation (e.g. work by Carlsson, McKelvey, Orsenigo, Zucker and Darby) these studies concentrate on the United States and Europe. The New Zealand biotechnology industry may be expected to develop along a different trajectory as a consequence of a markedly different set of initial and framework conditions. This paper presents the results of an ongoing study that aims to fill some of the gaps in our knowledge of innovation processes in New Zealand while using the international literature as a benchmark. The size and structure of modern biotech activity in New Zealand is described and compared to other OECD countries using biotech patent data and results from the New Zealand and Canadian biotechnology surveys. The paper then focuses on factors affecting innovation in biotechnology; framework conditions, government policy R&D funding and the role of networks and other linkages

Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide

Meeting growing global demand for food, fiber, and biofuel requires robust investment in agricultural research and development (R&D) from both public and private sectors. This study examines global R&D spending by private industry in seven agricultural input sectors, food manufacturing, and biofuel and describes the changing structure of these industries. In 2007 (the latest year for which comprehensive estimates are available), the private sector spent 19.7 billion on food and agricultural research (56 percent in food manufacturing and 44 percent in agricultural input sectors) and accounted for about half of total public and private spending on food and agricultural R&D in high-income countries. In R&D related to biofuel, annual private-sector investments are estimated to have reached 1.47 billion worldwide by 2009. Incentives to invest in R&D are influenced by market structure and other factors. Agricultural input industries have undergone significant structural change over the past two decades, with industry concentration on the rise. A relatively small number of large, multinational firms with global R&D and marketing networks account for most R&D in each input industry. Rising market concentration has not generally been associated with increased R&D investment as a percentage of industry sales.agricultural biotechnology, agricultural chemicals, agricultural inputs, animal breeding, animal health, animal nutrition, aquaculture, biofuel, concentration ratio, crop breeding, crop protection, farm machinery, fertilizers, Herfindahl index, globalization, market share, market structure, research intensity, seed improvement, Productivity Analysis,

Endogenous R&D Investment and Market Structure: A Case Study of the Agricultural Biotechnology Industry

Over the past three decades, the agricultural biotechnology sector has been characterized by rapid innovation, market consolidation, and a more exhaustive definition of property rights. The industry attributes consistently identified by the literature and important to this analysis include: (i) endogenous sunk costs in the form of expenditures on R&D; (ii) seed and agricultural chemical technologies that potentially act as complements within firms and substitutes across firms; and (iii) property rights governing plant and seed varieties that have become more clearly defined since the 1970s. This paper adds to the stylized facts of the agricultural biotechnology industry to include the ability of firms to license technology, a phenomenon observed only recently in the market as licensing was previously precluded by high transactions costs and “anti-stacking” provisions. We extend Sutton's theoretical framework of endogenous sunk costs and market structure to incorporate the ability of firms to license technology under well-defined property rights, an observed characteristic not captured in previous analyses of the sector. Our model implies that technology licensing leads to lower levels of industry concentration then what would be found under Sutton's model, but that industry concentration remains bounded away from perfect competition as market size becomes large.licensing, market structure, R&D, agricultural biotechnology, Research and Development/Tech Change/Emerging Technologies, L22, L24, Q16,

CREATING, PROTECTING, AND USING CROP BIOTECHNOLOGIES WORLDWIDE IN AN ERA OF INTELLECTUAL PROPERTY

Proponents tout the positive incentive-to-innovate effects of intellectual property rights (IPRs), while others maintain that the expanding subject matter and geographical extent of IPRs are stifling crop research, especially research and development (R&D) dealing with developing-country crop concerns. Much of this debate relies on anecdotes and misleading or incomplete evidence on the extent and nature of the IPRs pertaining to crop technologies, including the jurisdictional extent of the property rights and their practice. In this paper we review the evidence on the scope of agricultural R&D worldwide, provide new data on the structure of crop-related IPRs, and summarize trends on the uptake of proprietary bioengineered crops.plant patents, utility patents, plant breeders' rights, crop varieties, public and private agricultural R&D, biotechnology, Research and Development/Tech Change/Emerging Technologies,

Analysis on the evolution and governance of the biotechnology industry of China

The past twenty years have witnessed the high-speed growth of China’s biotechnology industry, and this presents an excellent opportunity to examine the changes that have taken place, especially, to carry out overall evaluation and governance analysis from the perspective of technology policies. Although China’s biotechnology industry has achieved tremendous extension both in scale and structure, the strengths it gained from basic research have been significantly weakened by commercialization. This has resulted in the comparatively limited scale of the whole industry, innovation-lacking products, poor output from research and development and scarcity of industrial resources. A large range of literature regarding China’s biotechnology industry attributes these outcomes to vague and even inappropriate governance, findings supported mainly by analyses based on the linear model of impact of government policies on industrial development. In these analyses, government, enterprises and companies as well as R&D organizations are either put on the opposite poles or in a straight line. After examining the nature of China’s biotechnology industry, and in particular the dynamic procedures in research and development, the authors of this paper argue that besides government, enterprises and R&D organizations, a diverse array of factors should be taken into account as we tackle issues emerging in understanding the development of China’s biotechnology industry. Furthermore, these factors, human or nonhuman, should not be arranged as opposing poles or linearly connected points on a straight line. They are in fact all knitted in networks and act as both knitters and knots. China’s biotechnology industry gains its strength to develop and evolve from these networks, thus its governance must be aimed at improving their stability and quality. Although the main disciplinary perspectives of this research are historical and sociological (including identification of the three development stages of biotechnology in China since 1978 to present days), a large number of concepts and ideas from management studies as well as an interdisciplinary approach are also incorporated into the analysis. The main model used in this research is Actor Network Theory, which is employed as a basic theoretical frame. From this starting point the authors attempt to make a closer examination of China’s biotechnology industry both at the level of technology research and development and at the level of commercialization. The modeling process in this research can be regarded as an attempt to explore the social construction of China’s biotechnology industry. The paper reveals how China’s biotechnology industry develops in the form of networks within the country’s social context and what kinds of relationships exist among the relevant factors; therefore, providing guiding insights for improving the governance of China’s biotechnology industry both in policy and management

MARKET STRUCTURE AND INNOVATION IN AG-BIOTECHNOLOGY

The objective of this paper is to make a contribution to a debated issue in industrial organization that of the relationship between market structure and innovation. We place this topic within a theoretical framework and in the context of the agricultural biotechnology research market. Our theoretical model addresses how firm R&D decisions are affected by upstream and downstream market structures, farmer adoption decisions, and patent strength.Research and Development/Tech Change/Emerging Technologies,