Files
Abstract
It is widely accepted that new technology is an important source of agricultural growth.
Developing countries have tried a variety of policies to accelerate the development and
diffusion of new technology. These policies include: (1) government investment in
agricultural research and extension, (2) tax breaks and other incentives to private companies
that conduct agricultural research, and (3) incentives to transfer new technology developed
outside the country. At the same time, many countries have other policies that reduce the
incentive of private companies to do research or transfer technology. These include
restrictions on importing technology and importing research inputs, restrictions on which
companies are allowed to do research, and regulations that reduce the profitability of
innovation.
The opposite side of this issue is the U.S. farmer's complaint that multinational
companies are transferring U.S. technology to other nations. Some farmers and their
representatives argue that this transfer of technology hurts American farmers by increasing
the productivity of our competitors and reducing the amount of U.S. grain demanded by
importing nations. There are reports of attempts by U.S. farmers to restrict the outflow of
technology by restricting seed exports.
At present, the debate about these issues is hampered by the absence of empirical studies
on the importance of these flows of technology or the impact of policies on these technology
transfers. In practical terms, it is not clear how much technology can be transferred
directly and how much has to be substantially modified before it can be used in a new country.
Without such information, it is impossible to determine how important policies which impede
the flow of material technology like seeds or chemicals will be or whether foreign research
will make these technologies available anyway.
In this paper, we have attempted to measure the impact of public sector research, the
transfer of technology embodied in a product, and private sector research by multinationals on
one major crop - corn. The results indicate that technology transfer through trade and
private sector research by multinational seed companies play an important role in increasing
agricultural productivity.