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Measuring the Intensity of Competition in the Japanese Beef Market

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  • Reed, Michael R.
  • Saghaian, Sayed H.

Abstract

A residual demand model for beef exports to Japan is specified and estimated. The objective is to estimate the extent of market power. It is assumed that each exporting country faces a downward-sloping residual demand curve, which reflects the market demand minus the supplies of competitors, and that exporters maximize profit through their output decisions. The analysis is disaggregated by beef cut and form to capture the variation by beef market segments. The results indicate that the highest markup of price over marginal cost belongs to U.S. frozen ribs, the only indication of market power by U.S. exporters. Canada is found to have limited market power, whereas Australia and New Zealand enjoy some market power, including five chilled beef categories.

Suggested Citation

  • Reed, Michael R. & Saghaian, Sayed H., 2004. "Measuring the Intensity of Competition in the Japanese Beef Market," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(01), April.
  • Handle: RePEc:ags:joaaec:42942
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    References listed on IDEAS

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    1. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
    2. Glauben Thomas & Loy Jens-Peter, 2002. "Pricing-to-Market versus Residual Demand Elasticity Analysis of Imperfect Competition in Food Exports: Evidence from Germany," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-21, October.
    3. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
    4. Green, John R. & Hayes, Dermot J. & Khan, Linda & Kihl, Young Whan & Knipe, C. Lynn & Olson, Dennis & Ramaswami, Sridhar & Rust, Robert & Sapp, Stephen G. & Seim, Emerson L. & Wahl, Thomas I. & Clemen, 1990. "Meat Marketing in Japan: A Guide for U.S. Meat Exporting Companies," Staff General Research Papers Archive 539, Iowa State University, Department of Economics.
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    Citations

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    Cited by:

    1. Gafarova, Gulmira & Perekhozhuk, Oleksandr & Glauben, Thomas, 2015. "An econometric analysis of market power in Azerbaijani wheat market: Evidence from Kazakhstan and Russia," 2015 Conference, August 9-14, 2015, Milan, Italy 211642, International Association of Agricultural Economists.
    2. Miljkovic, Dragan & Jin, Hyun Joung, 2006. "Import Demand for Quality in the Japanese Beef Market," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.
    3. Crespi, John M. & Hahn, William & Jones, Keithly & Schulz, Lee L. & Chen, Chen-Ti, 2016. "A Study in U.S. Export Beef Competitiveness: Do Cattle Inventories Matter?," 2017 Allied Social Science Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250113, Agricultural and Applied Economics Association.
    4. Evans, Edward & Ballen, Fredy, 2014. "Assessing the Intensity of Market Competition in the US Papaya Import Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), July.
    5. Shigekazu Kawashima & Deffi Ayu Puspito Sari, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 27-41, January.
    6. Kawashima, Shigekazu & Sari, Deffi Ayu Puspito, 2010. "Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), March.
    7. Páll, Zsombor, 2015. "Three essays on the Russian wheat export," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 80, number 80.
    8. Iimi, Atsushi & Smith, James Wilson, 2007. "what is missing between agricultural growth and infrastructure development ? cases of coffee and dairy in Africa," Policy Research Working Paper Series 4411, The World Bank.
    9. Nakajima, Toru, 2012. "Estimating Time Variation of Market Power: Case of U.S. Soybean Exports," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124775, Agricultural and Applied Economics Association.
    10. Yasser S. A. Mazrou, 2015. "Does Egyptian orange exports really have a market power in Saudi Arabia market?," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 5(7), pages 167-174, July.
    11. Evans, Edwardv A. & Ballen, Fredy H., 2015. "Competitive Behavior in the U.S. Green Skin Avocado Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 46(3), November.
    12. Zhang, Qiang & Reed, Michael R. & Saghaian, Sayed H., 2007. "Export Market Pricing Decisions and Market Power in World Grain Markets: A Duopoly Model for Soybeans," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34949, Southern Agricultural Economics Association.
    13. Alamri, Yosef & Saghaian, Sayed, 2016. "Measuring the Intensity of Competition among Rice Exporters to Saudi Arabia," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252678, Southern Agricultural Economics Association.
    14. Iimi, Atsushi, 2007. "Infrastructure and trade preferences for the livestock sector : empirical evidence from the beef industry in Africa," Policy Research Working Paper Series 4201, The World Bank.

    More about this item

    Keywords

    beef; Japan; market power; market share; residual demand; F12; L13; Q17;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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