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Vertical integration and non-linear price adjustments: The Spanish poultry sector

Author

Listed:
  • Monia Ben-Kaabia

    (Department of Economic Analysis, University of Zaragoza, Spain)

  • José M. Gil

    (CREDA-UPC-IRTA, Department of Agrofood Engineering and Biotechnology, Polytechnic University of Catalonia, Barcelona, Spain)

  • Mehrez Ameur

    (CREDA-UPC-IRTA, Department of Agrofood Engineering and Biotechnology, Polytechnic University of Catalonia, Barcelona, Spain)

Abstract

The analysis of asymmetries in the price-transmission mechanism at different levels of the marketing chain provides a good indicator of market efficiency in vertically related markets. The objective of this paper is to investigate the non-linear adjustments of prices in the poultry marketing chain in Spain. The methodology used is based on the multivariate approach to specify and estimate a threshold autoregressive model. Price relationships at feed industry, producer, and retail levels are considered. Results indicate that, in the long run, price transmission is perfect and any supply or demand shocks are fully transmitted to all prices in the system. In the short run, price adjustments between the feed and the farmer levels are fairly symmetric and are representative of a cost-push transmission mechanism. On the other hand, retailers benefit from any shock, whether positive or negative, that affects supply or demand conditions when price spreads are increasing, while price behavior is closely related to competitive markets when faced with declining price spreads. [EconLit citations: C320, Q130.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 253-271, 2005.

Suggested Citation

  • Monia Ben-Kaabia & José M. Gil & Mehrez Ameur, 2005. "Vertical integration and non-linear price adjustments: The Spanish poultry sector," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 253-271.
  • Handle: RePEc:wly:agribz:v:21:y:2005:i:2:p:253-271
    DOI: 10.1002/agr.20046
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    References listed on IDEAS

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    Cited by:

    1. Rezitis Anthony N & Stavropoulos Konstantinos S, 2011. "Price Transmission and Volatility in the Greek Broiler Sector: A Threshold Cointegration Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-37, July.
    2. Bakucs, Lajos Zoltan & Falkowski, Jan & Ferto, Imre, 2012. "What causes asymmetric price transmission in agro-food sector? Meta-analysis perspective," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134765, Agricultural Economics Society.
    3. Parwez, Sazzad, 2015. "A Conceptual Model for Integration of Indian Food Supply chains," MPRA Paper 73310, University Library of Munich, Germany, revised 09 Aug 2015.
    4. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    5. Valdes, Rodrigo & Von Cramon-Taubadel, Stephan & Engler, Alejandra, 2015. "Transaction costs and trade liberalization: An empirical perspective from the MERCOSUR agreement," Food Policy, Elsevier, vol. 55(C), pages 109-116.
    6. Parwez, Sazzad, 2013. "Underdeveloped Supply Chain dynamics of Indian Agriculture: Reference to Information Technology and Knowledge Management," MPRA Paper 60442, University Library of Munich, Germany, revised 23 Feb 2014.
    7. Parwez, Sazzad, 2015. "A Conceptual Model for Integration of Indian Food Supply chains," MPRA Paper 73263, University Library of Munich, Germany, revised 09 Aug 2015.

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