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Regulation, Trade, and Market Power: Agricultural Chemical Markets and Incentives for Biotechnology

In: Regulating Agricultural Biotechnology: Economics and Policy

Author

Listed:
  • Vincent H. Smith

    (Montana State University)

Abstract

Chemical companies generally support environmental regulatory segregation of Canadian and U.S. agricultural chemical markets, apparently because it enables them to practice third-order price discrimination. This study provides new cross-section evidence that suggests that price discrimination is practiced. We consider the potential implications of chemical market segregation for the innovation and adoption of biotechnologies that are linked to chemical use and chemical prices in the context of a two-sector-two-country model solved as a two-stage game. Biotechnology implications of regulatory harmonization that reintegrates the two chemical markets are then examined.

Suggested Citation

  • Vincent H. Smith, 2006. "Regulation, Trade, and Market Power: Agricultural Chemical Markets and Incentives for Biotechnology," Natural Resource Management and Policy, in: Richard E. Just & Julian M. Alston & David Zilberman (ed.), Regulating Agricultural Biotechnology: Economics and Policy, chapter 0, pages 397-419, Springer.
    • Handle: RePEc:spr:nrmchp:978-0-387-36953-2_18
    DOI: 10.1007/978-0-387-36953-2_18
    as

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