Patents, R&D, and market structure in the US food processing industry

This study investigates the effects of market structure and research and de velopment (R&D) on the innovative activities of firms. Fixed and random eff ects count data models are estimated with firm-level data for the U.S. food processing industry. Results show a positive association between patents a nd R&D, and patents and market structure, suggesting that firms which exhib it noncompetitive behavior are likely to develop new products and processes . Significant intra-industry spillovers of knowledge are identified using i ndustry R&D. For this industry, deadweight losses from imperfect competitio n may be offset by greater product variety and quality of food products for consumers.