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The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology

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Alan C. Marco
Gordon C. Rausser

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Abstract

Few empirical studies have addressed the impact of the patent system on industry structure. Using firm-level patent data for firms in plant biotechnology, we develop a measure of patent enforceability. Duration models show that patent statistics are useful predictors of the timing of consolidation and that patent enforceability is an important factor influencing the likelihood of consolidation. Acquisitions in plant biotechnology may be motivated by the enforcement of patent rights when firms have overlapping technologies; some merger activity may be explained by attempts to avoid mutually blocking technology, as exemplified by the case of Roundup Ready corn. Copyright ©2008 American Agricultural Economics Association.

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Article provided by American Agricultural Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 90 (2008)
Issue (Month): 1 (02)
Pages: 133-151
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Handle: RePEc:bla:ajagec:v:90:y:2008:i:1:p:133-151

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  1. SHELDON, Ian, 2008. "The Biotechnology Sector: "Bounds" to Market Structure," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6078, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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