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Modeling Agricultural Innovation in a Rapidly Developing Country: The Case of Chinese Pesticide Industry

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  • Shi, Guanming
  • Pray, Carl E.

Abstract

Technology and innovation play an increasingly important role in the economic development of both developed and developing countries. We investigate how policy and market factors influence firms’ (or other potential innovators’) decisions on innovation or imitation by developing a conceptual model and then empirically testing it using pesticide innovation data from a rapidly developing country, China. We find that the government encouraged local innovation by opening regions to more international trade, more investment in public research and education, strengthening intellectual property right (IPR) enforcement, and limiting the role of foreign inventors. However, the role of the extension of patent life in the early 1990s has little impact. Theory and some of our measures of market size suggest that this factor also is important, but the empirical evidence is mixed. The results suggest that the government policies for openness, public research and education and IPR enforcement can encourage innovation. Limiting foreign invention could encourage more local patenting but might limit Chinese farmers’ access to new technology.

Suggested Citation

  • Shi, Guanming & Pray, Carl E., 2011. "Modeling Agricultural Innovation in a Rapidly Developing Country: The Case of Chinese Pesticide Industry," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103744, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103744
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    File URL: http://purl.umn.edu/103744
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    References listed on IDEAS

    as
    1. John Crespi & Stéphan Marette, 2002. "Generic Advertising and Product Differentiation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 691-701.
    2. Simon GB Cowan & Simon Cowan, 2004. "Demand shifts and imperfect competition," Economics Series Working Papers 188, University of Oxford, Department of Economics.
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    More about this item

    Keywords

    Innovation; Pesticide; China; Patent; Agribusiness; Agricultural and Food Policy; Crop Production/Industries; International Development; Research and Development/Tech Change/Emerging Technologies; O31; O34; O38;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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