Farmer-Entrepreneurs, Agricultural Innovation, and Explosive Research and Development Cycles

Joao Faria and Franklin Mixon

Administrative Sciences, 2016, vol. 6, issue 4, 1-11

Abstract: Private sector research and development (R&D) in food processing has seen a growing share of agricultural R&D. This paper analyzes market and technological links between farmer-entrepreneurs and food processing firms. It is shown that processing sector R&D tends to display explosive cycles. To avoid explosive cycles, the processing sector sets the R&D growth path and its target. Dynamic adjustments are related to the shadow price of R&D and farm output price. In equilibrium, the effects of increases in technological innovations (e.g., at the farm level, in public agricultural research, from entrepreneurial talent, in processing sector R&D, and in the price of final goods) on agricultural price and output are positive. The patent race does not affect steady-state agricultural price and output, nor processing sector R&D; it only reduces the opportunity cost of R&D.

Keywords: agricultural innovations; research and development cycles (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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