Source: UNIV OF WISCONSIN submitted to NRP
UNIVERSITY AGRICULTURAL INNOVATION UNDER INTELLECTUAL PROPERTY RIGHTS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
0194526
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2002
Project End Date
Sep 30, 2004
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
UNIV OF WISCONSIN
21 N PARK ST STE 6401
MADISON,WI 53715-1218
Performing Department
AGRI & APPLIED ECONOMICS
Non Technical Summary
The advent of exclusive property rights for university research has created major changes in the missions of U.S. universities. Despite concerns raised little evidence exists on the benefits and tradeoffs of agricultural patenting. The work will analyze tradeoffs and synergies between agricultural patenting and the other outputs of the agricultural college. This study will provide a basis for university resource allocations in research.
Animal Health Component
40%
Research Effort Categories
Basic
40%
Applied
40%
Developmental
20%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60971103010100%
Knowledge Area
609 - Economic Theory and Methods;

Subject Of Investigation
7110 - Research on research management;

Field Of Science
3010 - Economics;
Goals / Objectives
1. Develop a framework permitting tests for, and measurement of, the impact of property rights, industry spillovers, and federal research dollars on US university incentives to invest in patentable agricultural research at the possible expense of other traditional Land Grant outputs. 2. Construct the databases necessary for implementing such tests, including the necessary links between agricultural patents (both quality and quantity), university research publications, agricultural students, and university inputs such as capital equipment, R&D expenditures, and personnel. 3. Employ (1) and (2) to examine the changing incentives in generating research in agriculture at Land Grant universities.
Project Methods
This work takes as its starting point the cost function framework developed by Baumol, Panzar, and Willig (1988) for analyzing scale and scope economies in industrial production. Since their work first appeared this cost function approach has been used extensively on many different industries including banking (e.g., Eakin, McMillen, and Buono, 1990; Clark, 1996) and for universities (e.g., de Groot, McMahon, and Volkvein, 1991; Cohn, Rhine, and Santos, 1989). Most of that literature uses the cost function approach to identify efficiency and inefficiency in the production process. In this case, while measurements of efficiency and inefficiency will be produced, the primary metrics of interest are returns to scale and economies of scope: i.e. whether patents are complementary with other products of the agricultural college. The results from this cost function estimation can demonstrate whether, and to what extent, there are synergies, economies of scope, between patentable research and non-patentable research. In addition a finding of scale economies in patenting would suggest that the process of agricultural patenting holds more benefits for large land grant universities. Such a finding would suggest that patenting might worsen levels of inequality between Land Grant universities.

Progress 10/01/02 to 09/30/04

Outputs
The Bayh-Dole Act of 1980, key court decisions, and several breakthrough process technologies, paved the way for a period of remarkable growth in the patenting of life science research by U.S. universities in the 1980s and 1990s. This research project has succeeded in analyzing the tradeoffs and synergies between the multiple missions of US Land Grant universities. I have created a set of unique data sets that have been used to analyze the production of articles, patents, and students at US Land Grant universities. Using a multiple-output cost framework and panel data on 96 universities over two decades this project has examined whether economies of scope and/or scale are present in university production of three major life science research outputs: journal articles, patents, and doctorates. The results show strong evidence of significant economies of scope between articles and patents and economies of scale in article and patent production, suggesting that larger universities and land-grant universities have distinct cost advantages in the production of high quality life science research outputs. Policy implications for the future of agricultural research at US Land Grant universities are brought forth from the results. The work on this project has already resulted in 5 publications in major agricultural economics journals listed below along with another five that are currently in submission. In addition the Hatch funding became the seed work for successful funding from both the USDA National Research Initiative (NRI) and the National Science Foundation (NSF) worth $550,000. Thus the work funded here is now on sustainable funding from outside sources.

Impacts
The contribution of this study will be to provide a basis for university resource allocations in research, both in focus of research (basic vs applied) and in types (patentable vs non-patentable). The understanding of this process, generated from this work, can lead toward better policies to promote agricultural research and development at Land Grant universities.

Publications

  • Foltz, Jeremy D. "Discussion: Economies of Scale and Scope in Agricultural Research" Papers and Proceedings from 2003 Annual Meeting, "Patent Policy and Agriculture" Principle paper session. American Journal of Agricultural Economics. 85(Number 5, 2003):1283-1284.
  • Foltz, J.D., K. Kim, and B. Barham. "A Dynamic Analysis of University Agricultural Biotechnology Patent Production." American Journal of Agricultural Economics. February, 2003: 189-197.
  • Foltz, Jeremy D., Bradford Barham, and Kwansoo Kim. "Synergies or Tradeoffs in University Life Science Research." Food Systems Research Group Working Paper FSWP2003-1. July, 2003.
  • Barham, Bradford, Jeremy Foltz, and Kwansoo Kim. "Trends in University Ag-Biotech Patenting". Review of Agricultural Economics. Fall, 2002.
  • Dhar, Tirtha and Jeremy Foltz. "Assessing the Impact of Intellectual Property Rights in the Plant/Seed Industry", Chapter 15 in J. Kesan ed. Seeds of Change. Forthcoming, 2005.


Progress 01/01/03 to 12/31/03

Outputs
This project has met the following objectives: 1. Developed a framework permitting tests for, and measurement of, the impact of property rights, industry spillovers, and federal research dollars on US university incentives to invest in patentable agricultural research at the possible expense of other traditional Land Grant outputs. 2. Constructed the databases necessary for implementing such tests, including the necessary links between agricultural patents (both quality and quantity), university research publications, agricultural students, and university inputs such as capital equipment, R&D expenditures, and personnel. 3. Employed (1) and (2) to examine the changing incentives in generating research in agriculture at Land Grant universities.

Impacts
The contribution of this study will be to provide a basis for university resource allocations in research, both in focus of research (basic vs applied) and in types (patentable vs non-patentable). The understanding of this process, generated from this work, can lead toward better policies to promote agricultural research and development at Land Grant universities.

Publications

  • Foltz, Jeremy D. Discussion: Economies of Scale and Scope in Agricultural Research. American Journal of Agricultural Economics. 85(Number 5, 2003):1283-1284.
  • Barham, Bradford, Frederick Buttel, Jeremy Foltz. Use of Genetically Modified Crops in Wisconsin, Chapter in Status of Wisconsin Agriculture, 2002. U. of Wisconsin Dept. of Ag. &Applied Economics. 5 pages.
  • Kim, Kwansoo, Jeremy Foltz, and Bradford Barham. Are There Synergies or Tradeoffs Between Articles and Patents in University Ag-Biotech Research? Abstract in Journal of Agricultural and Resource Economics. 2003
  • Foltz, Jeremy D., Bradford Barham, and Kwansoo Kim. Synergies or Tradeoffs in University Life Science Research. Food Systems Research Group Working Paper FSWP2003-1. July, 2003.