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Market Integration: Case Studies of Structural Change

Author

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  • Franken, Jason R.V.
  • Parcell, Joseph L.
  • Sykuta, Michael E.
  • Fulcher, Christopher L.

Abstract

The grain/oilseed industry is undergoing considerable structural change through mergers and new value-added businesses, which raises price-related questions. We analyze the level of price integration prior to and following a merger between two grain firms and the start-up of a producer-owned ethanol facility. This research utilizes error correction vector autoregression analysis to compute market integration structural change effects. We find evidence that market integration initially increases with the merger, but deteriorates with time following the merger. We find no significant localized change in the level of price integration for the case of a new value-added business.

Suggested Citation

  • Franken, Jason R.V. & Parcell, Joseph L. & Sykuta, Michael E. & Fulcher, Christopher L., 2005. "Market Integration: Case Studies of Structural Change," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), pages 1-10, October.
    • Handle: RePEc:ags:arerjl:10243
    DOI: 10.22004/ag.econ.10243
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    References listed on IDEAS

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    1. Bedrossian, Arakel & Moschos, Demetrios, 1988. "Industrial Structure, Concentration and the Speed of Price Adjustment," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 459-476, June.
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    4. Parcell, Joseph L. & Mintert, James R. & Plain, Ronald L., 2004. "An Empirical Investigation of Live-Hog Demand," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(3), pages 1-15, December.
    5. Goodwin, Barry K., 1992. "Forecasting Cattle Prices in the Presence of Structural Change," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 24(2), pages 11-22, December.
    6. Merle D. Faminow & Bruce L. Benson, 1990. "Integration of Spatial Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 49-62.
    7. Dixon, R J, 1983. "Industry Structure and the Speed of Price Adjustment," Journal of Industrial Economics, Wiley Blackwell, vol. 32(1), pages 25-37, September.
    8. Barry K. Goodwin & Ted C. Schroeder, 1991. "Cointegration Tests and Spatial Price Linkages in Regional Cattle Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 452-464.
    9. Barry K. Goodwin & Nicholas E. Piggott, 2001. "Spatial Market Integration in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 302-317.
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    Cited by:

    1. Van Wart, Justin & Perrin, Richard K., 2009. "Understanding Spatial Welfare Impacts of a Grain Ethanol Plant," 2009 Conference, August 16-22, 2009, Beijing, China 50823, International Association of Agricultural Economists.
    2. Cain, JewelwayneS. & Parcell, Joe L., 2014. "Soybean Oil Spatial Price Dynamics," 2014 Conference, April 21-22, 2014, St. Louis, Missouri 285824, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    3. Parcell, Joe & Franken, Jason, 2024. "Determinants of Beef Market Price Dynamics," 2024 Conference, April 22-23, 2024, St. Louis, Missouri 379010, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    4. Franken, Jason R.V. & Parcell, Joe L. & Tonsor, Glynn T., 2011. "Impact of Mandatory Price Reporting on Hog Market Integration," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 43(2), pages 229-241, May.

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