Premium
The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology
Author(s) -
Marco Alan C.,
Rausser Gordon C.
Publication year - 2008
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.01046.x
Subject(s) - consolidation (business) , enforcement , industrial organization , business , mergers and acquisitions , microbiology and biotechnology , accounting , finance , biology , law , political science
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.