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Does Farm and Processing Industry Structure Matter for Price Transmission? Some Evidence From Transition Countries: A Comparison of Dairy Sectors in Hungary and Poland

Author

Listed:
  • Zoltan Bakucs

    (Institute of Economics Research Centre for Economic and Regional Studies Hungarian Academy of Sciences)

  • Jan Falkowski

    (Faculty of Economic Sciences University of Warsaw, Poland)

  • Imre Ferto

    (Institute of Economics Research Centre for Economic and Regional Studies Hungarian Academy of Sciences)

Abstract

Rapid and thorough changes have recently taken place in dairy supply chain in the whole Central and Eastern Europe. Growing concerns have been expressed that these changes may negatively affect farmers' relative position towards downstream industry, due to market power exercised by the latter. In response to this, the present paper aims to investigate the price transmission mechanism in two countries from the region, namely Poland and Hungary and contrast the results with dairy market organisations specific for these countries. Using cointegrated vector autoregression and controlling for potential structural breaks, it is shown that Polish milk prices, as opposed to Hungarian ones, are characterised by short- and long-term asymmetries. We discuss a number of potential explanations supporting the empirical results. We consider, among others, differences between the dairy chain structures and the role of FDI.

Suggested Citation

  • Zoltan Bakucs & Jan Falkowski & Imre Ferto, 2012. "Does Farm and Processing Industry Structure Matter for Price Transmission? Some Evidence From Transition Countries: A Comparison of Dairy Sectors in Hungary and Poland," CERS-IE WORKING PAPERS 1212, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1212
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    References listed on IDEAS

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    Cited by:

    1. Judit Nagy & Zsófia Jámbor, 2019. "Competitiveness in Dairy Trade – the Case of EU and the Visegrad Group Countries," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 11(4), December.
    2. Zoltán Bakucs, Lajos & Fertő, Imre & Szabó, Gábor G., 2010. "Contractual relationships in the Hungarian milk sector," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52700, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).

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    More about this item

    Keywords

    price transmission; dairy sector; Hungary; Poland;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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