The organizational choice of technology transfer mode: Theory and application to the genetically modified plant industry

Abstract

The objective of the present paper is to identify the determinants of the form of collaboration initiated between an upstream innovator and a downstream producer in order to incorporate a new input and commercialize an innovation consisting of a quality enhanced final product, with an empirical application to the genetically modified (GM) plant industry. The choice of upstream firm between license, joint venture, merger, or a subsidiary is modeled as a function of three parameters: degree of quality improvement engendered by the new input, the market share of the downstream producer, and the capability of the downstream producer to incorporate the new input and commercialize it successfully.