Impact of Technological Innovation on Global Crop Export Trade: The Example of Innovation in GM Technology

Abstract

ABSTRACT Biological breeding technology is a significant scientific and technological innovation in the world. It is also a crucial strategic plan in China's efforts to improve its seed industry. This paper examines the impact of transgenic technology on global crop export trade since its introduction in the production field. The study analyzed the binary marginal data of genetically modified (GM) soybean technological innovation and export in 41 countries worldwide from 2002 to 2012. The analysis utilized a panel regression model. The results indicate that GM technological innovation has a significant and positive association with the intensive margin of soybean export growth. However, it has an insignificant effect on the export extensive margin. The impact of GM technological innovation on the export extensive margin of different crops is heterogeneous. The cultivation of GM crops (GMOs) has been found to have a nonsignificant impact on food crops like soybeans and corn but a positive and significant impact on industrial commodity crops such as cotton. Furthermore, additional analyses indicate that the policy of planting GMOs has a positive moderating effect on technological innovation that affects the export‐intensive margin while having a negative moderating effect on technological innovation that acts on the export‐extensive margin. Technological innovation affects market forces and impacts the intensive margin of export growth. The global trade of crops has been driven by innovations in genetically modified technology. Policy support and market power have also played a significant role in the success of each country.

Keywords

• crop trade
• export margin
• genetic engineering
• market power
• technological innovation