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When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market

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Author Info
Asche, Frank
Steen, Frode

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Abstract

In 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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5781.

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Date of creation: Aug 2006
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Handle: RePEc:cpr:ceprdp:5781

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Related research
Keywords: anti-dumping; market power; salmon markets;

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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  1. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92. [Downloadable!] (restricted)
  2. Lau, Lawrence J., 1982. "On identifying the degree of competitiveness from industry price and output data," Economics Letters, Elsevier, vol. 10(1-2), pages 93-99. [Downloadable!] (restricted)
  3. Asche, Frank, 1996. "A System Approach to the Demand for Salmon in the European Union," Applied Economics, Taylor and Francis Journals, vol. 28(1), pages 97-101, January. [Downloadable!] (restricted)
  4. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier. [Downloadable!] (restricted)
  5. Guttormsen, Atle G., 2002. "Input Factor Substitutability In Salmon Aquaculture," Marine Resource Economics, Marine Resources Foundation, vol. 17(2). [Downloadable!]
  6. Shaffer, Sherrill, 1993. "A Test of Competition in Canadian Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(1), pages 49-61, February. [Downloadable!] (restricted)
    Other versions:
  7. Bernstein, Jeffrey I, 1994. "Exports, Margins and Productivity Growth: With an Application to the Canadian Softwood Lumber Industry," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 291-301, May. [Downloadable!] (restricted)
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  8. Considine, Timothy J., 2001. "Markup pricing in petroleum refining:: A multiproduct framework," International Journal of Industrial Organization, Elsevier, vol. 19(10), pages 1499-1526, December. [Downloadable!] (restricted)
  9. Asche, Frank, 1997. "Trade Disputes And Productivity Gains: The Curse Of Farmed Salmon Production?," Marine Resource Economics, Marine Resources Foundation, vol. 12(1). [Downloadable!]
  10. Gruben, William C. & McComb, Robert P., 2003. "Privatization, competition, and supercompetition in the Mexican commercial banking system," Journal of Banking & Finance, Elsevier, vol. 27(2), pages 229-249, February. [Downloadable!] (restricted)
  11. Frank Asche, 2001. "Testing the effect of an anti-dumping duty: The US salmon market," Empirical Economics, Springer, vol. 26(2), pages 343-355. [Downloadable!] (restricted)
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  12. Rosenbaum, David I. & Sukharomana, Supachat, 2001. "Oligopolistic pricing over the deterministic market demand cycle: some evidence from the US Portland cement industry," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 863-884, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Haldrup, Niels & Møllgaard, Peter & Nielsen, Claus Kastberg, 2005. "Sequential versus simultaneous market," Working Papers 02-2005, Copenhagen Business School, Department of Economics. [Downloadable!]
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