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Licenses, governance, concentration and market imperfections in the Norwegian salmon industry

Author

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  • Jamali Jaghdani, Tinoush
  • Čechura, Lukáš
  • Ólafsdóttir, Guðrún
  • Guðbrandsdóttir, Ingunn Ýr

Abstract

A proposal of a 40% rent tax on salmon farming in Norway in September 2022 prompted debate about the level of market imperfection in the Norwegian salmon industry and the magnitude of the available rent at the primary stages of production. The production of farmed salmon in the coastal areas of Norway is contingent on having licenses for aquaculture practices. This industry has evolved into a huge sector with large corporates holding numerous licenses and successfully exporting salmon to many countries across the world. This development has increased concerns about concentration and possibly the creation of rents and market imperfections in the industry. In this study, the markup approach and stochastic frontier methodology were used to investigate market imperfections in the Norwegian salmon industry. The analysis is based on salmon producers' and primary processors' financial data for the 2008-2018 period. In order to interpret the markup estimations, we analyzed available data on the development of licenses and operational costs, and we explored the literature on the industry's governance. The findings indicate a low level of concentration and a low level of market imperfections, which was also reduced over the study period, and was higher for small and medium-sized firms.

Suggested Citation

  • Jamali Jaghdani, Tinoush & Čechura, Lukáš & Ólafsdóttir, Guðrún & Guðbrandsdóttir, Ingunn Ýr, 2025. "Licenses, governance, concentration and market imperfections in the Norwegian salmon industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 29(4), pages 578-616.
    • Handle: RePEc:zbw:espost:336256
    DOI: 10.1080/13657305.2025.2475043
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    References listed on IDEAS

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    1. Ola Kvaløy & Ragnar Tveterås, 2008. "Cost Structure and Vertical Integration between Farming and Processing," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(2), pages 296-311, June.
    2. Ingunn Y. Gudbrandsdottir & Nína M. Saviolidis & Gudrun Olafsdottir & Gudmundur V. Oddsson & Hlynur Stefansson & Sigurdur G. Bogason, 2021. "Transition Pathways for the Farmed Salmon Value Chain: Industry Perspectives and Sustainability Implications," Sustainability, MDPI, vol. 13(21), pages 1-23, November.
    3. Tinoush Jamali Jaghdani & Ulf Johansen & Maitri Thakur & Thomas Glauben, 2024. "Salmon trade duration: The application of firm‐level trade transaction data from the Norwegian salmon industry," Agribusiness, John Wiley & Sons, Ltd., vol. 40(2), pages 325-348, April.
    4. Ola Flaaten & Knut Heen & Thórólfur Matthíasson, 2017. "Profit and Resource Rent in Fisheries," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 311-328.
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