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Measuring Bilateral Market Power in International Markets of Vertically Differentiated Agricultural Commodities

Author

Listed:
  • Yamaura Koichi

    (International Environmental and Agricultural Science, Tokyo University of Agriculture and Technology, Tokyo, Japan)

  • Xia Tian

    (Agricultural Economics, Kansas State University, Manhattan, KS, USA)

Abstract

Two features of international markets of agricultural commodities are bilateral market power of exporting and importing countries and the coexistence of non-genetically modified (non-GM) and genetically modified (GM) products. The two features were not taken into account in most extant studies on market power in international agricultural commodity markets. This research develops a bilateral oligopoly model with the interaction between non-GM and GM commodity and conducts an empirical estimation for U.S.–Japan soybean trade. The estimation results show that U.S. exporters and Japanese importers are almost equally sharing the dominance of market power. The analysis in this research provides new measures of market power and improves the understanding on world soybean markets.

Suggested Citation

  • Yamaura Koichi & Xia Tian, 2016. "Measuring Bilateral Market Power in International Markets of Vertically Differentiated Agricultural Commodities," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 33-42, May.
    • Handle: RePEc:bpj:bjafio:v:14:y:2016:i:1:p:33-42:n:1
    DOI: 10.1515/jafio-2013-0020
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    References listed on IDEAS

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    1. Alex Dickson & Roger Hartley, 2013. "Bilateral oligopoly and quantity competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(3), pages 979-1004, April.
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    3. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    4. Yang, Seung-Ryong & Lee, Won-Jin, 2001. "Exporters' Market Power In Agricultural Import Markets In Korea," 2001 Annual meeting, August 5-8, Chicago, IL 20439, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    6. Marie‐Hélène Felt & Jean‐Philippe Gervais & Bruno Larue, 2011. "Market power and import bans: the case of Japanese pork imports," Agribusiness, John Wiley & Sons, Ltd., vol. 27(1), pages 47-61, Winter.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Maes, Dries & Vancauteren, Mark & Van Passel, Steven, 2019. "Investigating market power in the Belgian pork production chain," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 100(01-4), November.
    2. Dries Maes & Mark Vancauteren & Steven Van Passel, 2019. "Investigating market power in the Belgian porkproduction chain," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 100(1-4), pages 93-117.
    3. Hayashida, K., 2018. "Bargaining Power between Food Processors and Retailers: Evidence from Japanese Milk Transactions," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277730, International Association of Agricultural Economists.
    4. repec:ags:aaea22:335761 is not listed on IDEAS
    5. Dries Maes & Mark Vancauteren & Steven Passel, 2019. "Investigating market power in the Belgian pork production chain," Review of Agricultural, Food and Environmental Studies, Springer, vol. 100(1), pages 93-117, December.

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    More about this item

    Keywords

    bilateral oligopoly; market power; non-GM soybeans; vertically differentiated products;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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