Furtan, William Hartley

By: Ghazalian, Pascal L.; Furtan, William Hartley
This paper investigates the effect of innovation on primary agricultural and processed food product exports among the Organization for Economic Cooperation and Development (OECD) countries. A theoretical gravity equation that accounts for innovation is derived. The empirical exercise uses panel data sets covering 21 OECD countries for the period 1990-2003. The R&D capital stock is employed as a tangible way of measuring innovation. Empirical results show that R&D has enhanced exports in the primary agricultural sector. Meanwhile, the market expansion effect of R&D appears to be more than offset by the market power effect in the food processing sector, resulting in a decrease in exports. Also, evidence was found of a positive vertical channeling effect through which R&D in the primary agricultural sector increases exports of processed food products.
By: Furtan, William Hartley; Gray, Richard S.; Holzman, J.J.
This study examines the optimal approval strategy for genetically modified (GM) wheat varieties in Canada and the United States. Without an affordable segregation system, the introduction of GM wheat will create a market for "lemons" that will result in the loss of important export markets. Using a differentiated product trade model for spring wheat, with endogenous technology pricing, a payoff matrix is generated for the possible approval outcomes. Results show that the existence of the market externality removes the first-mover advantage for wheat producers from the approval of the new GM wheat variety. There are large distributional effects; wheat producers lose economic surplus, while consumers and the biotech company gain economic surplus. With a larger domestic market, the United States is more likely to experience net gain in economic surplus from the introduction of GM wheat.