The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology |
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Authors: | Alan C Marco and Gordon C Rausser |
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Institution: | Alan C. Marco is associate professor of economics at Vassar College. Gordon C. Rausser is the Robert Gordon Sproul Distinguished Professor, Department of Agricultural &Resource Economics, U.C. Berkeley. |
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Abstract: | Few empirical studies have addressed the impact of the patent system on industry structure. Using firm-level patent data for firms in plant biotechnology, we develop a measure of patent enforceability. Duration models show that patent statistics are useful predictors of the timing of consolidation and that patent enforceability is an important factor influencing the likelihood of consolidation. Acquisitions in plant biotechnology may be motivated by the enforcement of patent rights when firms have overlapping technologies; some merger activity may be explained by attempts to avoid mutually blocking technology, as exemplified by the case of Roundup Ready corn. |
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Keywords: | hazard estimation mergers and acquisitions mutually blocking patents patent enforceability patent rights plant biotechnology |
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