Material transfer agreements: An economic and econometric analysis

a r t i c l e i n f o Keywords: Material transfer agreements Payment for ecosystem services Non-monetary payment Moral satisfaction Probit with endogenous regressors This paper uses econometric analysis for understanding the determinants that affect the payment mechanism in material transfer agreements (MTAs). These contracts regulate the exchange of peculiar ecosystem services (genetic and biological materials) between a provider and a recipient of the service. The paper uses a set of " model " contracts from the late 2000s, gathered from the U.N. World Intellectual Property Organization (WIPO) and the Convention of Biological Diversity (CBD). Empirical results show that the probability that a payment scheme is included in the contract negatively depends on the presence of an acknowledgment obligation to the provider of the material. Probably aware of the complexity and uncertainty of the recipient's research activity, the provider (and the CBD) requires to be compensated through the recognition of his/her important input to the research venture. In economics, this can be interpreted as payment in terms of moral satisfaction. This paper uses econometric analysis for understanding the determinants that affect the payment mechanism in material transfer agreements (MTAs). These contracts regulate the exchange of peculiar ecosystem services (genetic and biological materials) between a provider and a recipient of the service. The objective of the exchange often is the performance of R&D activities. The paper uses a set of " model " contracts from the late 2000s, gathered from the U.N. World Intellectual Property Organization (WIPO) and the Convention of Biological Diversity (CBD). The agreements are characterized by a very simple " core " structure. The main provisions regulate the contract duration, and (when stipulated) a price for the exchange and other (monetary and non-monetary) benefits. Most contracts, however, do not prescribe for a price, or any other monetary benefit from the exchange. In economics, the role of contract terms is twofold: (1) aligning marginal incentives ex ante and (2) preventing wasteful efforts to ex post redistribution of existing surplus. The ex-ante pricing strategy , or better, the lack of an exchange price in most of the contracts' sample spurs to deepening the issue of ex ante marginal incentives to material transfer contracting, since the lack of an exchange price, means that incentives to contracting are non-monetary. In alternative , if from the economic point of view the exchange price represents a signal of scarcity, a lack …