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Manchester Grand Hyatt, Mission Beach A
Agricultural and Applied Economics Association
Studying Innovation in Agriculture – New Data and New Tools
Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: GianCarlo Moschini, Iowa State University
How Do Patents Shape Global Value Chains? International and Domestic Patenting and Value-Added Trade
AbstractIntellectual property plays an important role in the global economy through its impact on technology diffusion, knowledge transfer and competition. As production has become fragmented into coordinated processes that span the globe, the role of patents has evolved. Patents can transmit technical knowledge and facilitate upstream and downstream licensing arrangements, thereby increasing the flow of intermediate and final goods and catalyzing knowledge spillovers across sectors and regions. We exploit an algorithmic concordance that links patents to industry and product classifications to estimate how patents affect the organization and structure of Global Value Chains (GVCs). Using the World-Input Output Database as the basis for various GVC measures, we find that increased international patenting inflows are associated with greater value-added production, but that this positive effect is driven entirely by industries in high-income countries. We also find some evidence of heterogeneity in these effects by region and sector-specific R&D intensity. We explore this heterogeneity with a specific focus on dominant patterns in agriculture, food, and life science sectors.
Venture Capital, Startups, and R&D for Agriculture and Food
AbstractVenture capital (VC) investments in privately held startup companies that are intensively engaged in agricultural research and development (R&D) has increased substantially in recent years, from just tens of millions annually in the early 2000s to reportedly more than 7 billion dollars in 2017. These investments are important for several reasons. First, the magnitudes of these VC investments are no longer negligible relative to levels of estimated private sector investments in agricultural R&D, yet they have not typically been accounted for in estimates of agricultural R&D spending. Second, these investments are supporting R&D being conducted by new entrants in a number of industries that have been highly concentrated and where incumbents may have been taking relatively incremental approaches to R&D strategy. Third, R&D by technology based startups represent an important channel for diffusion of results from public sector agricultural research, in both developed and developing countries. This paper describes recent trends in agricultural technology startup companies and the VC investments made in them. This paper also seeks to answer the question of what might account for the upturn in VC investment in agricultural technology startups in recent years. To do so, we construct a dataset of more than 4,500 startups, located in 125 countries. For a subset of these, we have complete financial information on over 10,000 financial transactions from 1981 to 2018, allowing us to study the startup investment life cycles and exit outcomes over time. Results indicate that previous successful exits from agricultural technology startups – in the forms of Initial Public Offering (IPO) and Merger & Acquisition (M&A) – lead to higher investments today. Payoffs from prior investments seem to signal the viability of investments in the agricultural sector. But among exit events, prior IPOs appear to have a stronger effect on new investments than prior M&As.
University of California-Berkeley
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights