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Firm-level Forces Underlying Concentration in Agriculture

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  • Mussell, Al
  • Martin, Larry J.
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    Abstract

    Although industry concentration in agriculture has a long history, the analysis of concentration and normative recommendations on it are a source of ongoing controversy in agricultural economics. The received approaches to the study of industry concentration are based on the structure-conduct-performance model or on the “new†empirical industrial organization literature which explicitly models competitive behaviour. However, each of these approaches wants for analysis of the specific firm-level decision processes that produce its predicted outcome. An alternative approach is to analyze the internal motivations for vertical and horizontal integration that exist within firms and that ultimately result in market concentration. From this perspective, market concentration results from more than simply competition among firms for economic rents.

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    File URL: http://purl.umn.edu/45729
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    Bibliographic Info

    Article provided by Canadian Agricultural Economics Society in its journal CAFRI: Current Agriculture, Food and Resource Issues.

    Volume (Year): (2003)
    Issue (Month): 04 ()
    Pages:

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    Handle: RePEc:ags:cafric:45729

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    Web page: http://caes.usask.ca/papers/cafri/index.php
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    Keywords: Environmental Economics and Policy;

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    1. Oliver Hart & John Moore, 1985. "Incomplete Contracts and Renegotiation," Working papers 367, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    3. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-58, December.
    4. Brent Hueth & Ethan Ligon, 1999. "Producer Price Risk and Quality Measurement," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 512-524.
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