Agricultural Biotechnology as an Intangible Asset: Incentives for Transnational Vertical Integration in Agribusiness

Abstract

Exact date of working paper unknown.An emerging global phenomenon is the application of biotechnology to food and agricultural production. How individual firms will relate to biotechnological advances and the decisions made regarding the commercialization of biotechnology will influence the structure of the industrial landscape in global markets and international trade. The scope of biotechnology in the United States and Europe and the economic incentives for transnational vertical integration of biotechnological products or processes is examined. An economic model is used to assess the nature of incentives for the transnational vertical integration of biotechnology. The analysis argues that rights to commercial biotechnology products or processes are intangible assets which may provide incentives for vertical foreign direct investment by the firms holding such rights. The transnational character of intellectual property as an intangible asset is explored briefly. Implications are drawn from the analysis concerning transnational vertical integration of biotechnology