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Vertical and Horizontal Coordination in the Agro-biotechnology Industry: Evidence and Implications

Published online by Cambridge University Press:  28 April 2015

Nicholas Kalaitzandonakes  and
Bruce Bjornson
Nicholas Kalaitzandonakes
Affiliation:
Department of Agricultural Economics, University of Missouri
Bruce Bjornson
Affiliation:
Department of Agricultural Economics, University of Missouri
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Abstract

Agro-biotechnology is evolving from a pre-commerical phase dominated by basic research science to a commercial phase oriented around marketing products. In pursuing innovation rents in the commercial phase, firms are reorienting their strategies around complementary marketing and distribution assets. This is impacting vertical and horizontal industry structure. Conversely, industry structure is also impacting firm strategies. Horizontal alliances and consolidation continue from the pre-commercial phase into the commercial phase, while vertical coordination and integration strategies are accelerating rapidly. Interplay between firm strategy and industry structure is too complex for firms to anticipate early in the pre-commercial phase for long-term strategy formulation.

Keywords

acquisitionsagricultural biotechnologyfirm strategyindustry consolidationindustry structuremergers
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 29 , Issue 1 , July 1997 , pp. 129 - 139
Copyright
Copyright © Southern Agricultural Economics Association 1997

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