The International Consortium on Agricultural Biotechnology Research (ICABR)
Intellectual Property Protection and the International Marketing of Agricultural Biotechnology: Firm and Host Country Impacts
University of Illinois
University of Illinois
Universidad del Belgrano
The protection of intellectual property rights has been a contentious issue over the last 20 years. Industrialized nations have moved to knowledge-based economies and simultaneously trade barriers have fallen, making intellectual property vulnerable. Adding to this vulnerability are conflicting international institutional environments, belief systems, and economic realities. The debate over IPR protection has become a significant global trade issue between the North, which maintains a comprehensive IPR institutional environment with active enforcement mechanisms, and the South where enforcement and real commitment has been lagging.
There has been much debate about the impact of alternative IPR regimes (tight or loose) on the welfare of Southern economies. Policy makers in both the South and the North search for arguments to convince recalcitrant Southern countries to follow the Northern model of strict IPR regimes. The South faced with a dilemma, searches for arguments to justify loose IPR regimes or alternatively to convince its populace that tighter IPR regimes are better for the nation.
While there has been much analytical work, mostly theoretical on the subject, the results are inconclusive in part due to the level of analysis. The theoretical models, valuable highlighting the drivers of firm and social welfare, are by their nature abstractions and have produced contradictory conclusions. The empirical models have been superficial focusing on either secondary aggregated data and proxy variables or qualitative surveys asking managers to describe the impact of weak IPR.
One of the predicaments of empirical analysis in this area is trying to measure the investment not made. Our research uses the case study method and the unique setting of the corn and soybean seed business to actually measure how the lack of IPR protection distorts the strategy and investment behavior of a firm. Due to the agronomic differences between corn and soybeans, corn is naturally protected from IPR pirating while soybeans are not. In a Northern setting, the businesses are run in parallel with similar investments, human resource needs, and marketing strategies. In a Southern setting significant and measurable differences are expected due to the firms inability to protect its intellectual soybean technology.
Methodologically, this manuscript empirically analyzes hypotheses derived from IPR theory, by comparing the business practices of the corn and soybean business units within Pioneer Hi-Bred, Argentina. We hypothesize that there will be sharp differences between the corn and soybean business units in a Southern setting which will reflect the "investment not made" that has been so elusive to other empirical studies. Theory predicts differences in quality and quantity of infrastructure investment, supply chain relationships, resource needs, human resource management, and financial performance. At the firm level it would indicate that there are different business strategies for different IPR environments even though the traded products are identical. Finally, the study will measure the impacts on the host country in terms of human capital, under investment, reduced cash flow, and smaller knowledge spillovers. These impacts plus those on the market for soybean seed will comprise a measure of the economic impact of weak IPR.