Agricultural Cooperatives And Cost-Reducing R&D In The Agri-Food System
This paper develops a sequential game theoretic model of heterogeneous producers to examine the effect of cooperative involvement on process innovation activity in the agricultural input-supplying sector. Analytical results show that the involvement of an open-membership cooperative in process innovation activity can be welfare enhancing and, thus, socially desirable. The presence of the co-op can increase the arrival rate of process innovations and productivity growth while reducing the price of agricultural inputs. The effectiveness of the co-op in innovation activity is determined by its initial market share and the size of the innovation costs.
|Date of creation:||2003|
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