Heterogeneity of Property Rights Strategies in A Global Context: The Case of Genetically Modified Soybean Seeds

• Published date: 01 February 2015
• DOI: http://doi.org/10.1002/gsj.1091
• Author: Guilherme Fowler A. Monteiro,Decio Zylbersztajn
• Date: 01 February 2015

HETEROGENEITY OF PROPERTY RIGHTS

STRATEGIES IN A GLOBAL CONTEXT: THE CASE

OF GENETICALLY MODIFIED SOYBEAN SEEDS

GUILHERME FOWLER A. MONTEIRO1* and DECIO ZYLBERSZTAJN2

1Insper Institute of Education and Research, São Paulo,

2School of Economics, Business and Accounting, University of São Paulo,

São Paulo, Brazil

The protection of property rights is a pressing strategic issue in the genetically modified

soybean seed industry. Because the soybean plant is characterized by self-reproducibility, it is

essential for biotechnology firms to establish strategies of property rights appropriation. To

obtain new insights into this issue, we investigate in two directions. First, we propose a model

of value appropriation in which property rights strategies are influenced by the institutional

conditions and the monitoring technology in a given country. Second, we analyze three cases

of property rights protection with respect to soybean seeds. We then present a comparative

discussion of the cases and develop some propositions based on the theoretical framework and

the case studies. We conclude with a discussion of our model’s managerial implications.

Copyright © 2015 Strategic Management Society.

INTRODUCTION

In his presidential address to the American Eco-

nomic Association in 2009, Avinash Dixit said:

‘If the government does not protect property rights,

at least not as well as the owners require, many

alternative private arrangements arise to meet the

owners’ needs’ (Dixit, 2009: 8).

Expanding on Dixit (2009)’s proposition, this

article strengthens the general understanding of

how the institutional environment may influence

the property rights protection strategies in the

genetically modified (GM) soybean seed industry.

The article contributes to two research streams: the

increasing literature on the host country value

capture concerns of transnational firms (Rangan

and Sengul, 2009; Rangan and Drummond, 2011;

Alcacer and Ingram, 2013) and the evolving dis-

cussion on the influence of the institutional envi-

ronment on strategic analysis (Peng et al., 2009;

Monteiro and Pianna, 2012).

As noted by Monteiro and Zylbersztajn (2012,

2013), the development of biogenetics has intro-

duced a new competitive paradigm in the seed

sector. Any seed may be viewed as a technology

vector that consists of different characteristics,

whereby a GM seed represents a specific case in

which one or more seed attributes are not normally

attainable by the species under natural conditions.

Because genetic traits may result from the R&D

efforts of different companies, the seed plays the

role of a platform that shapes a complex relation

between a biotech company or companies and

farmers.

One of the most widespread GM seeds is a

soybean seed that has a tolerance to the herbicide

Keywords: property rights; strategy; institutional environment;

global operations; GM soybean seed

*Correspondence to: Guilherme Fowler A. Monteiro, Insper

Institute of Education and Research, R. Quatá, 300, São Paulo,

SP Brazil 04546-042, E-mail: guilhermefam@insper.edu.br

Global Strategy Journal

Global Strat. J., 5: 69–83 (2015)

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/gsj.1091

Copyright © 2015 Strategic Management Society