Link Between R&D Intensity and Market Concentration: Analysis of Brazilian Corn and Soybean Seed Markets

As one of the main producers of corn and soybeans in the last three decades, Brazil’s expanded production could be explained by productivity enhancements that have occurred with the introduction of innovations in their seed markets. However, these markets also experienced a reconsolidation in the form of a market concentration. We aimed to test the hypothesis that there is an inverse relationship between these factors at the seed market. To test this hypothesis, we applied a GMM with instrumental variables to a theoretical framework. Results suggested that this link depends on market characteristics, such as in which year GMO were introduced. In the first period for corn, the relationship between these factors was direct, but after the GMO introduction, the relationship became inverse; alternatively, for soybeans, this dynamic was inverted. In addition, we found out that the public investment and propriety-rights regulations were important to determining the R&D intensity.

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 Record created 2017-04-01, last modified 2020-10-28

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