PATENTS, R&D, AND MARKET STRUCTURE IN THE U.S. FOOD PROCESSING INDUSTRY

By: Gopinath, Munisamy; Vasavada, Utpal
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Gopinath, Munisamy; Vasavada, Utpal, PATENTS, R&D, AND MARKET STRUCTURE IN THE U.S. FOOD PROCESSING INDUSTRY, Journal of Agricultural and Resource Economics, Volume 24, Issue 1, July 1999, Pages 127-139

This study investigates the effects of market structure and research and development (R&D) on the innovation activities of firms. Fixed and random effects count data models are estimated with firm-level data for the U.S. food processing industry. Results show a positive association between patents and R&D, and patents and market structure, suggesting that firms which exhibit noncompetitive behavior are likely to develop new products and processes. Significant intra-industry spillovers of knowledge are identified using industry R&D. For this industry, deadweight losses from imperfect competition may be offset by greater product variety and quality of food products for consumers.