Agricultural Trade Liberalization and Downstream Market Power: The Ad Valorem Case
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Mohammad Mainul Hoque
Exports of agricultural commodities to developed countries play a significant role in the economies of many developing countries. The elimination of import tariffs has the potential to benefit producers in the developing countries, but estimates of the extent of the gains from trade liberalization typically assume perfect competition. Significant concentration in the food processing and retailing sectors of the U.S. and the EU undermine the plausibility of this assumption in the case of agricultural trade, however. Sexton, Sheldon, McCorriston, and Wang (2007) develop a model of the effects of trade liberalization that accounts for the vertically-linked and concentrated characteristics of the developed countries’ food markets. Their analysis is limited to the case of a constant per unit tariff, however. In this paper, we extend the analysis of the effects of trade liberalization in the presence of downstream market power to the case of an ad valorem tariff, and we find important qualitative differences from the results for the unit tariff case.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Evaluating Reforms in Canadian Chicken Marketing Mechanisms Using a Linear-Quadratic Inventory Model
- Prices as Quality Signals: Evidence from the Wine Market
- The Effect of Proposition 2 on the Demand for Eggs in California
- An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans
- Protected Designation of Origin Revisited
- The Influence of Local Selling Decisions on Organic Farm Incomes
- Optimal Farmer Choice of Marketing Channels in the Ethiopian Banana Market
- Prices, Promotions, and Supermarket Mergers
- The Impact of Perceived Prices on Willingness to Pay in Experimental Auctions
- The Demand for Seafood Eco-Labels in France
- Agricultural Trade Liberalization and Downstream Market Power: The Ad Valorem Case
