Searching for genes : public and private spillovers in agricultural research
Crop research has undergone a major transformation in North America and many other parts of the word. The introduction of biotechnology and Intellectual Property Rights (IPR) alter the nature of research products, which in turn changes the structure of the agricultural research industry from perfectly competitive to imperfectly competitive. The implications of these changes are not fully understood. The objective of this thesis is to develop a broader understanding of how biotechnology, changes in IPRs and the resulting changes in industry structure have affected private and public incentives for agricultural research. The specific goals include development of an analytical framework to examine the incentives for private R&D expenditure, and the spillovers between basic and applied research and between private and public firms. To achieve the objective of this study, a stochastic analytical model within an imperfect competitive framework was developed. Specifically, what is developed is a three-stage search/imperfect competition model characterized by two research firms developing and selling differentiated products to producers who are heterogeneous with respect to some attributes. Agricultural research is modeled with explicit recognition of the search process, which allows us to recognize research as a stochastic process with sporadic outcomes and to explicitly model the interaction between basic and applied research. The findings of this study are mainly in the form of propositions. It was shown that basic public research "crowds in" applied private research while applied public research "crowds out" applied private research. The current technology level and the cost of the experimentation negatively affect private investment, while the price of the final product positively affects the private investment. Moreover, it is concluded that, the greater the product heterogeneity, the higher the price charged with the same amount of R&D. Finally, it is shown that the increase in IPR's and the firm's market size has a positive effect on the private firm's amount of R&D investment. The econometric analysis, using data from the canola industry, provides empirical evidence to support the analytical framework and the proposition derived in this study. The study also draws a number of policy implications from the derived propositions.
DegreeDoctor of Philosophy (Ph.D.)
CommitteeGray, Richard S.
Copyright DateDecember 2000
research -- economic aspects