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Market power or relative efficiency? an examination of profitability performance in the Canadian food and beverage sector

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  • Tim Hazledine

    (Department of Agricultural Economics, University of British Columbia at Vancouver)

Abstract

The article uses data on all the firms in sixteen Canadian food and beverage manufacturing industries to examine intra-industry profitability differences. The skewedness of profit performance within industries is informative for the debate on whether interindustry profitability differences in price-raising market power or in the incidence of unusually efficient firms in an industry. It is found that six of the industries appear to be quite competitive and that eight have some form of market power, usually accompanied, however, by efficiency differences as well.

Suggested Citation

  • Tim Hazledine, 1989. "Market power or relative efficiency? an examination of profitability performance in the Canadian food and beverage sector," Agribusiness, John Wiley & Sons, Ltd., vol. 5(1), pages 25-42.
    • Handle: RePEc:wly:agribz:v:5:y:1989:i:1:p:25-42
    DOI: 10.1002/1520-6297(198901)5:1<25::AID-AGR2720050104>3.0.CO;2-W
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    1. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    2. Richard Schmalensee, 1978. "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 305-327, Autumn.
    3. Ravenscraft, David J, 1983. "Structure-Profit Relationships at the Line of Business and Industry Level," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 22-31, February.
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    1. Zdeňka Žáková Kroupová & Gabriela Trnková & Monika Roman, 2022. "Is Market Power or Efficiency behind Economic Performance? The Case of the Czech Food Processing Industry," Economies, MDPI, vol. 10(9), pages 1-22, September.
    2. McKee, Gregory J. & Shaik, Saleem & Boland, Michael A., 2009. "Role of Financial Variables in Explaining the Profitability of North Dakota Farm Supply and Grain Marketing Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2), pages 1-12.
    3. Sarker, Rakhal & Ratnesena, Shashini, 2014. "Revealed Comparative Advantage and Half-A-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef and Pork Sectors," Working Papers 165675, Canadian Agricultural Trade Policy Research Network.
    4. Roopali Batra & Ashima Kalia, 2016. "Rethinking and Redefining the Determinants of Corporate Profitability," Global Business Review, International Management Institute, vol. 17(4), pages 921-933, August.

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