Market Making and the Role of Intermediary Firms in Marketing of Genetically Modified Livestock Products
Morteza Haghiri *
School of Science and the Environment, Memorial University - Grenfell Campus, 20 University Drive, Corner Brook, NL A2H 5G4, Canada.
*Author to whom correspondence should be addressed.
Abstract
Agricultural biotechnology, by changing the process of agricultural production in the agri-food sector has posed serious challenges for the industry. The fundamental problem was that the biotechnology industry, with tremendous vertical integration from the research sector through to farm gate, has still relied upon decentralized markets to commercialize their products. Their innovations have for the most part been left to find their consumer markets.
This work was done by an illustrated review of the existing literature and reports.
The major contribution of this study to the economic literature is three-fold. First, it addresses an important issue in marketing GM livestock products. Second, the study discusses the theory of market microstructure in production economics. Third, it provides policy implications for managers and policymakers in the industry.
This paper examined the theory of market-making and the role of intermediaries in creating new markets and hypothesizes that without intermediation in the biotechnology market, the optimal market size will not be realized, reducing private research investment and depriving society of the potential social gains of this new technology.
Keywords: GM livestock products, intermediary firm, market-making.