Volume 14, Issue 1 -

This paper analyzes whether or not different non-tariff measures (NTM) like a standard or a mandatory label can be considered as protectionist in presence of market imperfections. From a welfare-based approach, protectionism occurs when the instrument maximizing domestic welfare is different from the alternative instrument maximizing international welfare inclusive of foreign profits. A framework taking into account different tools shows the complexity for characterizing protectionism related to different NTM. When the standard impacts variable costs, the mandatory label can be protectionist. When the standard impacts sunk costs, the standard can be protectionist. The framework is also useful for empirically characterizing the impact of NTM related to a specific product. An application to shrimp trade illustrates the feasibility of the welfare measure, for an ex ante evaluation of possible environmental regulations that could be implemented in the future. This application confirms that the tool maximizing domestic welfare does not systematically correspond to the tool maximizing international welfare.

This article explores the relationships among mergers and acquisitions (M&A), consolidation, concentration and inventive activity in the agricultural biotechnology industry. We adapt testable hypotheses from the conceptual literature. We empirically test each hypothesis and interpret the results in terms of existing explanations of consolidation and the level of inventive activity, and antitrust policy. We find aggregate inventive activity to be related to M&A activity, but whether the effect is positive or negative is dependent on the type of M&A. Further, greater number of public sector firms in the research market, as well as increasing industry concentration, are both found to increase overall innovation.

Two features of international markets of agricultural commodities are bilateral market power of exporting and importing countries and the coexistence of non-genetically modified (non-GM) and genetically modified (GM) products. The two features were not taken into account in most extant studies on market power in international agricultural commodity markets. This research develops a bilateral oligopoly model with the interaction between non-GM and GM commodity and conducts an empirical estimation for U.S.–Japan soybean trade. The estimation results show that U.S. exporters and Japanese importers are almost equally sharing the dominance of market power. The analysis in this research provides new measures of market power and improves the understanding on world soybean markets.

The United States is the main destination for Dominican Republic (DR) green skin avocado exports accounting for over 70 % of the total DR green skin avocado exports from 2004 to 2013. Given the US dominant position in the US-DR green skin avocado trade, the United States may have an incentive to deviate from the competitive markets model, and behave as an oligopsonist. The present study seeks to assess potential oligopsonistic behavior in the US green skin avocado import market. A residual supply model was specified and estimated. Findings indicate that despite its dominant position in the world avocado trade, there is no empirical evidence that indicates that the United States exercises market power over DR exports of green skin avocados.

This article deals with the impact of legal rules on incentives in the seeds sector to create new plant varieties. The first category of rules consists in intellectual property rights and is intended to address a problem of sequential innovation and R&D effort. The second category concerns commercial rules that are intended to correct a problem of adverse selection. We propose a dynamic model of market equilibrium with vertical product differentiation that enables us to take into account the economic consequences of imposing either Plant Breeders’ Rights (PBRs) or patents as IPRs and either compulsory registration in a catalog or minimum standards as commercialization rules. The main result is that the combination of catalog registration and PBRs adopted in Europe is hardly supported by the model calibrated on data for wheat in France.

The growth in the US market share of soybeans including Monsanto’s patented “Roundup Ready” (RR1 and RR2) traits has been extraordinary. This growth is likely due to a number of factors that affect the number of competitor firms and individual farmers’ seed choices. This study outlines how two path dependencies, transition and expected fine, may be contributing. Herein, these path dependencies are explored to consider whether they are legitimate, how they might affect a farmer’s planting decisions and their possible effects on soybean seed markets. Our simulation models consider the number of periods for patented seed market share to converge from zero to 85%. Results indicate that the path dependencies create pockets of significant convergence influence over various alternative price ranges, i.e. the dependencies can accelerate or create a convergence that would not have existed without them. When a relatively large expected fine path or a strong version of the transition dependency is considered, the pocket includes reasonable price premiums for conventional and organic seed.

Since many types of food are experience goods and have a collective reputation, the food industry has various minimum quality standards. However, in the food industry, sometimes not all firms adhere to the standard, and consumers do not always distinguish between compliant and non-compliant firms. This paper finds that when there is only partial compliance, having a food quality standard or increasing compliance for the standard does not always increase profits for the firms adhering to the standard, even though average industry quality increases. Potential solutions to the free riding problem are analyzed.

This study investigates the price transmission mechanisms between the producer and the consumer for three major Greek agricultural products: fresh potatoes, tomatoes and cucumbers. The empirical analysis uses a Markov Switching Vector Error Correction model which accounts for asymmetric responses of the producer and the consumer to price increases and decreases. The asymmetric effects are tested with in-sample as well as out-of-sample measures for each state. The response of the producer and the consumer to long-run deviations from the equilibrium and to lagged price changes is investigated along with the nature of the price shocks for each state. The empirical results show that potatoes and cucumbers give rise to similar price mechanisms even though the underlying characteristics of these two markets are different. Moreover, the empirical analysis shows that tomatoes and cucumbers result in different price relationships between the producer and the consumer despite the similar market characteristics.

This study examines the impact of channel concentration on retail prices in the traditional cheese market of Cyprus. The analysis is based on a panel data model for retail prices and a non-linear simultaneous equations model for the estimation of market power. Our results suggest that retail cheese prices tend to be positively related to producer concentration and negatively related to channel concentration. We provide explanations for these results based on the structure-conduct-performance and countervailing buyer power models in published industrial organization studies.

The objective of this study is to assess the degree and the structure of price dependence between different cuts of the beef industry in the USA. This is pursued using the statistical tool of copulas. To this end, it utilizes retail monthly data of beef cuts, within and between the quality grades of Choice and Select, over the period 2000–2014. For the Choice quality grade, there was evidence of asymmetric price co-movements between all six pairs of beef cuts under consideration. No evidence of asymmetric price co-movements was found between the three pairs of beef cuts for the Select quality grade. For the pairs of beef cuts formed between the Choice and Select quality grades, the empirical results point to the existence of price asymmetry only for the case of the chuck roast cut.

Alcohol consumption in Russia remains a topic of extensive debate and investigation. In this article we attempt to explore and analyze some factors affecting vodka, beer, dry wine and champagne consumption in the country by utilizing the most recent household level dataset. We made use of logistical regression approach as a key empirical tool. Our findings highlight that there exist different trends and patterns in contemporary alcohol drinking behavior among respondents. This paper rejects the common stereotype that only vodka is a popular variety of alcohol beverage in Russia. In a model with dry wine and champagne most of explanatory variables remain statistically significant.