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Article

Haiyan Deng, Ruifa Hu, Jikun Huang, Carl Pray, Yanhong Jin and Zhonghua Li

Economic interest groups such as seed, pesticide, feed, and food companies play an important role in supporting or preventing the production of genetically modified (GM…

Abstract

Purpose

Economic interest groups such as seed, pesticide, feed, and food companies play an important role in supporting or preventing the production of genetically modified (GM) crops. The purpose of this paper is to examine firm managers’ attitudes toward GM technology, biotechnology R&D investment, and political lobbying activities.

Design/methodology/approach

Using data from surveys of 160 managers in the food, feed, chemical, and seed industries in 2013-2014, this paper employed three probit models to examine the determinants of managers’ attitudes, biotechnology R&D investment, and lobbying activities.

Findings

The results show that most Chinese agribusiness managers are concerned about GM foods and oppose its adoption. Nevertheless, one-third of the firms invest in biotechnology R&D and less than 15 percent of managers lobbied the government to change biotechnology policies. The econometric estimation results suggest that profit change expectation is the main factor affecting managers’ attitudes and biotechnology R&D investment decisions, whereas lobbying activities are significantly influenced by their attitudes and biotechnology R&D investment. In addition, managers’ attitudes toward GM foods also significantly influence firms’ decisions to invest in biotechnology R&D.

Originality/value

This paper has improved on previous research in two ways. First, it analyses the determinants of agribusiness firm managers’ attitudes toward GM technology, biotechnology R&D investment, and lobbying activities. Second, the methodology involves an analysis of agribusiness firm survey data in the food, feed, chemical, and seed industries, which is the first time to use such data to research on economic interest group in agricultural biotechnology field.

Details

China Agricultural Economic Review, vol. 9 no. 3
Type: Research Article
ISSN: 1756-137X

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Book part

Carl E. Pray, Latha Nagarajan, Jikun Huang, Ruifa Hu and Bharat Ramaswami

Since the 1980s agricultural biotech investments by the public sector have increased substantially in both China and India. In the last two decades there has also been a…

Abstract

Since the 1980s agricultural biotech investments by the public sector have increased substantially in both China and India. In the last two decades there has also been a dramatic increase in private section investment in agricultural biotechnology particularly in India. The promise of major benefits of Bt cotton identified in early socioeconomic studies of Bt cotton has proven to be true. Bt cotton has spread to at least 66% and 85% of total cotton areas of China and India, respectively – wherever bollworm is a major problem. Bt cotton continues to control bollworm in both countries, and farmers continue as major beneficiaries rather than biotech or seed companies. The major impacts have been yield increases in India and reduced pesticides consumption in China. In China, evidence also suggests that Bt cotton has suppressed the bollworm population so that non-Bt cotton growers and producers of other crops that are susceptible to bollworm are also benefitting.

The chapter also provides evidence that in the near future Bt rice and Bt eggplant could have major positive impacts by reducing pesticide use and farmers’ exposure to chemical pesticides and increasing yields. Both crops were approved for commercial production by government biosafety regulators, but are not yet available for commercial cultivation.

Details

Genetically Modified Food and Global Welfare
Type: Book
ISBN: 978-0-85724-758-2

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Abstract

Details

China Agricultural Economic Review, vol. 9 no. 3
Type: Research Article
ISSN: 1756-137X

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Book part

Abstract

Details

Genetically Modified Food and Global Welfare
Type: Book
ISBN: 978-0-85724-758-2

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Article

Jintao Zhan, Yubei Ma, Xinye Lv, Meng Xu and Mingyang Zhang

Some researchers argue that consumers’ lack of knowledge is an important factor increasing risk for a new product derived from emerging agricultural technology. The…

Abstract

Purpose

Some researchers argue that consumers’ lack of knowledge is an important factor increasing risk for a new product derived from emerging agricultural technology. The purpose of this paper is to discuss the potential impacts and the differential effects of subjective and objective perceptions on Chinese consumers’ preferences for the application of a novel biotechnology.

Design/methodology/approach

Taking transgenic technology as an example and employing data from a survey of 1,000 consumers in Jiangsu Province, the authors develop a mixed-process regression model based on Fishbein’s multiple attributes attitude model.

Findings

The results suggest that there are apparent differences between Chinese consumers’ subjective perceptions and objective perceptions concerning transgenic technology and genetically modified (GM) food, and there exists certain selective perceptions of the emerging biotechnology. Having a subjective perception concerning transgenic technology has a positive effect on consumers’ overall attitudes, whereas subjective and objective perceptions concerning GM foods have a negative effect on consumers’ overall attitudes. Self-identification generated from subjective perception occupies a dominant position in determining consumers’ attitudes.

Originality/value

Consumers’ attitudes regarding an agricultural product depend on their perception of the attributes of the technology used to produce such a product. This study attempts to distinguish and empirically test urban consumers’ subjective perceptions (self-assessed or perceived) and objective perceptions (obtained from a test) about transgenic technology and GM foods and the impact of these four types of perception on the consumers’ attitudes regarding the application of transgenic technology. In this paper, the authors construct a mixed-process regression model to address the possible endogeneity of the perception variables.

Details

China Agricultural Economic Review, vol. 12 no. 1
Type: Research Article
ISSN: 1756-137X

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Article

Yanhong Jin, Yahong Hu, Carl Pray and Ruifa Hu

The Chinese Government has used a number of policies to encourage commercial agribusiness firms to do more innovation. These include public sector agricultural research…

Abstract

Purpose

The Chinese Government has used a number of policies to encourage commercial agribusiness firms to do more innovation. These include public sector agricultural research and development (R&D), public sector biotechnology research and innovation, subsidies for commercial research, encouraging foreign firms to invest in China as minority shareholders in joint ventures, and allowing commercial companies to raise money on the stock market. The purpose of this paper is to assess whether these policies were effective in stimulating innovations by commercial firms in China.

Design/methodology/approach

This study estimates the impact of public biotech research and other policies by employing an econometric model of patenting by commercial firms. It uses a unique data set collected from commercial agribusiness firms for the years 2001, 2004, 2005, and 2006. Addition data were collected from public research institutes and universities and patent data from the Derwent Innovations Index database. It employs four count data models for the empirical analysis.

Findings

This study finds a positive impact of public biotechnology (measured by the number of biotech patents of government research institutes and public universities) on commercial innovation measured by the number of patents granted to the commercial firms. As expected the firm’s research expenditure and having their own R&D center (as opposed to contracting R&D or no R&D investment at all) have a positive and statistically significant effect on the number of patents granted. The impacts of public R&D investment spending have no statistically significant effect on commercial innovation. Multi-national firms and publicly traded firms have fewer patents than their counterparts suggesting that policies to encourage multi-nationals and financing through stock markets had no impact on innovation.

Originality/value

This study is one of the first studies to untangle the relationship between government policies and innovation by commercial agricultural research output and public R&D investment and biotechnology. The main findings suggest that simply increasing research money to public research does not increase commercial innovations, but moving resources to the development patentable biotech does improve commercial research productivity. The results also suggest that policies to increase commercial research will also increase innovation. These could include strengthening the legal framework and institutional resources for public institutes to the protection and enforcement of intellectual properties.

Details

China Agricultural Economic Review, vol. 9 no. 3
Type: Research Article
ISSN: 1756-137X

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Book part

Tommy Tsung Ying Shih

Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on…

Abstract

Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on the policy agenda of many advanced nations. Measures that promote these developments include national capacity building in science and technology, the formation of technology transfer systems, and the establishment of industrial clusters. What these templates often overlook is an analysis of use. This chapter aims to increase the understanding of the processes that embed new solutions in structures from an industrial network perspective. The chapter describes an empirical study of high-technology industrialization in Taiwan that the researcher conducts to this end. The study shows that the Taiwanese industrial model is oversimplified and omits several important factors in the development of new industries. This study bases its findings on the notions that resource combination occurs in different time and space, the new always builds on existing resource structures, and the users are important as active participants in development processes.

Details

Interfirm Networks: Theory, Strategy, and Behavior
Type: Book
ISBN: 978-1-78052-024-7

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Zeynep Kocabiyik Hansen

This study investigates the conditions that shape the contractual structure of pharmaceutical-biotechnology R&D agreements and whether these collaborations have produced…

Abstract

This study investigates the conditions that shape the contractual structure of pharmaceutical-biotechnology R&D agreements and whether these collaborations have produced measurable impact on the overall R&D productivity of pharmaceutical companies. In one section, the effect of uncertainty due to the advances in technology on the structure of R&D contracts is discussed. Specifically, it is shown that newer technologies associated with higher uncertainty result in the choice of more hierarchical contract structures. In addition, the significance of R&D collaborations on the overall innovation process of pharmaceutical companies is evaluated. The results indicate that only some types of R&D alliances, signed in earlier stages of research, have a significant role in the patent production and drug discovery process.

Details

Issues in Entrepeneurship
Type: Book
ISBN: 978-1-84950-200-9

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Article

Ivana Blažková and Ondřej Dvouletý

This paper aims to investigate the effect of firm-specific determinants on the entrepreneurial success (measured through the objective financial performance) of the Czech…

Abstract

Purpose

This paper aims to investigate the effect of firm-specific determinants on the entrepreneurial success (measured through the objective financial performance) of the Czech food processing firms over 2003-2014 and with the main particular focus on capital structure and productivity as the tough challenges of the firms in transition and emerging economies.

Design/methodology/approach

Determinants of profitability are tested econometrically, as for the estimation technique, both-way fixed effects controlling for variety over the time and across enterprises were applied. The collected micro-panel data set consists of 10,509 observations and includes 1,804 firms. Estimated regression models with fixed effects are used to quantify the determinants of the financial performance, operationalized through three key performance indicators – price–cost margin, return on assets and return on equity.

Findings

Estimated econometric models supported hypothesis assuming a positive relationship between the labour productivity and profitability. In line with the assumptions based on the development of the Czech food market, high leverage of firms led to the decrease of profitability, which can be explained by the high financial distress costs and worsened market position of firms in the competitive environment. Ageing of firms and firm size were associated with the increase of profitability indicators.

Practical implications

The findings of the presented research are important for investors considering agribusiness as a part of their investment portfolios and for policymakers to enhance the economic efficiency of the food industry through regulations and public support, and particularly, from the firm management viewpoint, e.g. to pay attention to the debt policy due to the negative impact of high indebtedness on firm profitability, and to the productivity factors, which proved to be important drivers of entrepreneurial success.

Originality/value

Although the firm-specific factors responsible for firm performance have already been studied, the food processing industry has received limited interest from the empirical analysts, and the results are not always unequivocal. This study is expected to contribute to the literature on this subject, both empirically and methodologically, as to the best of the authors’ knowledge, no study has been encountered yet where the factors determining the profitability of the Czech food processing industry have been the focus. With regards to the collected micro-data set and the estimation technique, the study can be considered as extensive not only from the perspective of the research in the Czech Republic but also from the international perspective.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 11 no. 2
Type: Research Article
ISSN: 2053-4604

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Article

Patricia Mui‐Siang Tan and Chee Yeow Lim

This paper seeks to address the value relevance of summary accounting measures and fundamental income statement variables in the market valuation of biotech firms.

Abstract

Purpose

This paper seeks to address the value relevance of summary accounting measures and fundamental income statement variables in the market valuation of biotech firms.

Design/methodology/approach

A biotech firm's stock price was related to its underlying financial accounting variables. Using the Ohlson model, the linear function of book value and earnings was employed, and the basic model was augmented with additional accounting variables. These accounting variables may provide information relevant for forming an approximation on the present value of expected future abnormal earnings.

Findings

Results show non‐linearities in the pricing of accounting variables Both book value and earnings are value relevant, but positive earnings are positively priced while negative earnings are negatively priced. R&D spending and selling, general and administrative expenses are also priced as assets for loss‐reporting firms, and as expenses for profit‐reporting observations. Including analysts’ forecasts of future earnings and long‐term growth rate in the model results in an insignificant increase in the explanatory power of the regressions.

Research limitations/implications

Future research could attempt to examine the role of non‐financial variables which can proxy for the soft variables and intangibles like strategic alliances and product pipeline. Decomposing revenue into product sales, interest income and collaborative research revenue may further enhance our understanding on the determinants of the market value of biotech stocks.

Originality/value

This paper provides insights into the valuation of biotechnology stocks. Results show non‐linearities in the pricing of summary accounting measures and fundamental income statement variables.

Details

Review of Accounting and Finance, vol. 6 no. 3
Type: Research Article
ISSN: 1475-7702

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