Measuring Concentration in the Biotechnology R&D Industry: Adjusting for Interfirm Transfer of Genetic Materials

Abstract

A new measure of concentration is developed for innovation markets. The new measure accounts for strategic alliances in which one biotechnology firm grants another firm access to its proprietary plant gene constructs. Such alliances are common in biotechnology but are not considered in previous measures. Application of this measure to the plant biotechnology research and development (R&D) industry reveals that concentration is higher and more consistent over time than traditional concentration measures indicate.