The Effect of Farm Supply Shifts on Concentration and Market Power in the Food Processing Sector
In this paper we examine the marginal impact of changing farm supply on the market structure of the downstream food processing sector. We develop a theoretical model that allows for cost differences among processors and endogenizes downstream entry and exit. Comparative statics results are consistent with several well-established trends in the food processing sector. In particular, the analysis demonstrates that increasing concentration in the food processing sector is consistent with decreasing market power. Indeed, we find that when the farm supply curve shifts outward, an increase in concentration can only occur when there is a decrease in market power. Copyright 1997, Oxford University Press.
Volume (Year): 79 (1997)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:79:y:1997:i:2:p:524-531. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.