When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market
AbstractIn this paper we apply the Bresnahan-Lau (1982) model to test for market power in the European distribution of salmon. In this particular setting, the model also incorporates a test of whether dumping takes place over time. Utilising data at the import level, derived demand equations are specified rather then consumer demand. From 1997 a so-called salmon agreement that implied minimum prices, a growth ceiling and a feeding restriction program for Norwegian farmers was imposed. Here we test whether the agreement resulted in an increase in the Norwegian market power. The results suggest that Norway did not have market power prior to the salmon agreement, and we find no indication that dumping was taking place. However, the agreement led to Norwegian market power after 1997. It is interesting to note that the agreement was initiated to prevent anti dumping duty of 13% that Norwegian farmers would have to pay otherwise. The increase in mark-up from imposing the agreement is found to be in the order of 14-15%, suggesting that the Norwegian farmers saved a fee of 13% and gained a markup that was even higher.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5781.
Date of creation: Aug 2006
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Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-10-28 (Agricultural Economics)
- NEP-ALL-2006-10-28 (All new papers)
- NEP-COM-2006-10-28 (Industrial Competition)
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