Organizing R&D and managing innovation: Implications for investment in agricultural biotechnology R&D in Mexico.

This paper uses the incomplete contracts approach to analyze how to organize R&D activities. It addresses the complex questions on how to allocate control interfirm and intrafirm over the R&D process, how to organize the communication channels among researchers, or between researchers and manufacturing units within a firm, how to finance the research activities, and how to share property rights on innovations. The conclusions indicate how to build more efficient organization of R&D in agricultural biotechnology and how to guide public policy with regard to subsidies in the R&D sector or to the design of patent legislation. The implications of this approach for the financing of R&D in agricultural biotechnology helps to explain the low level of private investment in agricultural biotechnology RD in Mexico.