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Complementarities and spill-overs in mergers: an empirical investigation using patent data

  • Marco, Alan C.
  • Rausser, Gordon C

    ()

    (University of California, Berkeley. Dept of agricultural and resource economics and policy)

We investigate the merger behavior of firms in the plant biotechnology sector using firm-level patent data for public and private firms in the 1980s and 1990s. Conditional logit estimation is used to estimate the probability that the firms will match in mergers and spinoffs. We calculate several patent portfolio-based measures of complementarity and spillovers between firms, and find that both are important to defining a good match of acquirer and target. However, complementarities provide the more robust explanation. The mergers and spinoffs observed in plant biotechnology may have been designed to overcome the anti-commons problem of mutually blocking technology, an extreme form of complementarity. Our results highlight the need to integrate patent and competition policy.

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Paper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 930R.

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Length: 42 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:are:cudare:930r
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