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When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market

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  • Asche, Frank
  • Steen, Frode

Abstract

In this paper we apply the Bresnahan-Lau (1982) model to test for market power in the European distribution of salmon. In this particular setting, the model also incorporates a test of whether dumping takes place over time. Utilising data at the import level, derived demand equations are specified rather then consumer demand. From 1997 a so-called salmon agreement that implied minimum prices, a growth ceiling and a feeding restriction program for Norwegian farmers was imposed. Here we test whether the agreement resulted in an increase in the Norwegian market power. The results suggest that Norway did not have market power prior to the salmon agreement, and we find no indication that dumping was taking place. However, the agreement led to Norwegian market power after 1997. It is interesting to note that the agreement was initiated to prevent anti dumping duty of 13% that Norwegian farmers would have to pay otherwise. The increase in mark-up from imposing the agreement is found to be in the order of 14-15%, suggesting that the Norwegian farmers saved a fee of 13% and gained a markup that was even higher.

Suggested Citation

  • Asche, Frank & Steen, Frode, 2006. "When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market," CEPR Discussion Papers 5781, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5781
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    References listed on IDEAS

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    1. Thomas J. Prusa, 1997. "The Trade Effects of U.S. Antidumping Actions," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 191-214 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Chang, Shun-Chiao & Chang, Jui-Chuan Della & Huang, Tai-Hsin, 2012. "Assessing market power in the U.S. commercial banking industry under deregulation," Economic Modelling, Elsevier, vol. 29(5), pages 1558-1565.
    2. Niels Haldrup & Peter Møllgaard & Claus Kastberg Nielsen, 2008. "Sequential Versus Simultaneous Market Delineation: The Relevant Antitrust Market For Salmon," Journal of Competition Law and Economics, Oxford University Press, vol. 4(3), pages 893-913.
    3. Haldrup, Niels & Møllgaard, Peter & Nielsen, Claus Kastberg, 2005. "Sequential versus simultaneous market," Working Papers 02-2005, Copenhagen Business School, Department of Economics.

    More about this item

    Keywords

    anti-dumping; market power; salmon markets;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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