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

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  • João Ricardo Faria

    (College of Liberal Arts, The University of Texas at El Paso, Kelly Hall 418, El Paso, TX 79968, USA)

  • Franklin G. Mixon

    (Turner College of Business, Columbus State University, 4225 University Ave, Columbus, GA 31907, USA)

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.

Suggested Citation

  • João Ricardo Faria & Franklin G. Mixon, 2016. "Farmer-Entrepreneurs, Agricultural Innovation, and Explosive Research and Development Cycles," Administrative Sciences, MDPI, vol. 6(4), pages 1-11, September.
    • Handle: RePEc:gam:jadmsc:v:6:y:2016:i:4:p:13-:d:79190
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    References listed on IDEAS

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    2. Krishnakhi Choudhury & Kanagaraj Easwaran, 2019. "Agricultural entrepreneurship in Lower Brahmaputra Valley, Assam," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-13, December.

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