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Market Integration: Case Studies of Structural Change

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  • Franken, Jason R.V.
  • Parcell, Joe 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, Joe L. & Sykuta, Michael E. & Fulcher, Christopher L., 2005. "Market Integration: Case Studies of Structural Change," Agricultural and Resource Economics Review, Cambridge University Press, vol. 34(2), pages 163-172, October.
    • Handle: RePEc:cup:agrerw:v:34:y:2005:i:02:p:163-172_00
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    References listed on IDEAS

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    1. Schroeder, Ted C., 1997. "Fed Cattle Spatial Transactions Price Relationships," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(2), pages 1-16, December.
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    1. Franken, Jason R.V. & Parcell, Joseph L. & Tonsor, Glynn T., 2011. "Impact of Mandatory Price Reporting on Hog Market Integration," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(2), pages 1-13, May.
    2. 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.

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