A Worrisome Crop?
7 Pages Posted: 22 Jan 2011
Date Written: January 20, 2011
Research-and-development-driven industries tend to be concentrated, and the U.S. seed industry is no exception. Concerns about the presence and use of market power in such industries are not rare since products are differentiated. The balance between firm profits and investments in product quality and innovation is an important indicator of dynamic efficiency in the marketplace — and probably a more effective gauge of competition in dynamic and innovative industries. Empirical analysis contained in this article suggests that the U.S. seed industry experiences moderate market power but also dynamic market efficiency.
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