Effects of the biotechnology and intellectual property right law in the seed industry

In this dissertation, we analyze the changes in the seed industry structure in Brazil, in comparison with what has happened in this sector in the U.S.A. due to the use of biotechnology in the generation of new seeds. The derived demand model for Bt corn is calculated in the first paper, estimating parameters of willingness to pay (WTP) equation for the Corn Belt section of the U.S., using variety trial data from Nebraska, Iowa and Illinois for 1997–1999. The WTP at each data point is calculated through the difference of the variation in the profit and in the production cost between Bt and non-Bt production. The results suggest that WTP in some regions are not enough to cover Bt seed corn cost. The second and third papers examine coordination choices by firms in seed related industries. The choice model is based on a two-stage decision model of coordination choice between two firms. The first stage specifies the coordination/noncoordination choice as a function of complementary assets, while the second stage specifies the type of coordination choice as a function of transactions costs. The results suggested that transaction costs, as well as asset complementarities, influenced the changes in the seed industry structure in the USA. The IPR coefficient indicates that the cost to enforce the rights is driving firms to merge. The results for TRIAL indicate that biotechnology is not a strong driver in the decision to merger. On the other hand, although transaction costs influenced change in the seed industry structure in Brazil, asset complementarities are not important in taking the decision in the first level of choice. The proxy variables\u27 coefficients for uncertainty and opportunism indicate that sale, market share and IPR have significant positive effects in the decision to merger rather than contract, while TRIAL, representing latent biotechnology, has a negative effect