Collusion in the Hungarian Market for Raw Milk

Hockmann, Heinrich; Vőneki, Éva

doi:10.5367/000000009787762806

Cited by 14 publications

(17 citation statements)

References 8 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In addition, recent studies suggest that the role of IIT has been increasing in agricultural trade for both developed and developing countries (e.g., Leitão, ; Rasekhi and Shojaee, ; Varma, ; Wang, ). Moreover, recent studies confirm the existence of market power in the pork and dairy sectors in Hungary (Bakucs et al., ; Hockmann and Vöneki, ; Perekhozhuk et al., ).…”

Section: Introductionmentioning

confidence: 79%

Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector

Fertő

Jámbor

2014

Agricultural Economics

View full text Add to dashboard Cite

This article investigates the drivers of vertical intra‐industry trade (VIIT) in Hungarian agri‐food trade with the European Union (EU). It identifies three possible ways to measure intra‐industry trade (IIT) flows (GHM, FF, and N methods) and defines six hypotheses to test for the drivers of VIIT with three panel data models (static, dynamic, and FEVD). The results suggest that factor endowments are negatively, while economic size is positively and significantly related to VIIT. Distance and VIIT were found to be negatively related as is commonly the case in the standard gravity model. It was also found that VIIT is greater if a New Member State (NMS) is exporting agri‐food produce to an NMS, while EU accession has ambiguously influenced the share of VIIT. In general, it seems that our results are independent from model estimations and interestingly they do not differ considerably as we a priori expected. Moreover, our results seem surprisingly robust across various measurements of ITT.

show abstract

Section: Introductionmentioning

confidence: 79%

Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector

Fertő

Jámbor

2014

Agricultural Economics

View full text Add to dashboard Cite

show abstract

“…The majority of investigations involved estimating the degree of oligopoly and/or oligopsony power in markets for meat products (beef and pork) and livestock (cattle and hogs). Some studies were conducted in food, textile and tobacco manufacturing industries (Appelbaum, ; Lopez, ; Bhuyan and Lopez, ), in the dairy industry (Gohin and Guyomard, ; Chidmi et al ., ; Hockmann and Vöneki, ; Mérel, ; Perekhozhuk et al ., ; Perekhozhuk et al ., ), in grain and oil industries (O'Donnell et al ., ), in horticulture markets (Deodhar and Sheldon, ; Deodhar and Sheldon, ; Wann and Sexton, ), in coffee (Lopez and You, ; Bettendorf and Verboven, ) and tea markets (Weerahewa, ), in the pulp and paper industries (Bergman and Brännlund, ) and one study each in the sugar (Genesove and Mullin, ) and fish industries (Steen and Salvanes, ).…”

Section: Review Of Empirical Studies Of Market Power In the Agricultumentioning

confidence: 99%

Approaches and Methods for the Econometric Analysis of Market Power: A Survey and Empirical Comparison

Perekhozhuk

Glauben

Grings

et al. 2016

Journal of Economic Surveys

View full text Add to dashboard Cite

This study discusses two widely used approaches in the New Empirical Industrial Organization (NEIO) literature and examines the strengths and weaknesses of the Production-Theoretic Approach (PTA) and the General Identification Method (GIM) for the econometric analysis of market power in agricultural and food markets. We provide a framework that may help researchers to evaluate and improve structural models of market power. Starting with the specification of the approaches in question, we compare published empirical studies of market power with respect to the choice of the applied approach, functional forms, estimation methods and derived estimates of the degree of market power. Thereafter, we use our framework to evaluate several structural models based on PTA and GIM to measure oligopsony power in the Ukrainian dairy industry. The PTA-based results suggest that the estimated parameters of oligopsony power are significantly different from zero, while GIM-based results do not indicate any evidence of oligopsony market power in the Ukrainian dairy industry. Moreover, estimations results vary substantially due to the employed estimation procedure.Recent decades and years have been characterized by comprehensive advancements in various fields of economics, for example the recent developments in the application of theoretical and empirical concepts of NEIO. These advancements comprise, among others, the introduction of new and more flexible functional forms in econometric analysis and newly developed system estimation methods, particularly nonlinear full information methods. Given these developments, empirical studies of market power have become more sophisticated and provide new possibilities of using time-series and cross-sections data sets. These developments allow, for example, the extension of empirical models, which enables researchers to more precisely analyse and evaluate the degree of market power.A rather large number of studies are available in this research area dealing with a wide range of countries, markets or industries. Moreover, these studies are based on different information bases, that is, different aggregation levels, and employ different data frequencies and market structure models. Table 1 provides a detailed overview of existing market structure models in the field of agricultural and food markets focusing on homogenous products, and compares them with respect to their choice of functional forms, estimation methods and estimates of the degree of market power. 2 In total, 38 studies are included in the review, arranged by author's name in alphabetical order.Most empirical studies of market power have been conducted based on empirical data from developed countries such as Australia, Canada, France, Germany, and the United States.Within the empirical studies listed in Table 1, special attention has been paid to the examination of market power in beef packing industries (Schroeter). The majority of investigations involved estimating the degree of oligopoly and/or oligopsony power in markets for mea...

show abstract

“…Only a few studies have investigated agricultural market power issues in transition economies. The latter include the work of Hockmann and Vöneki () and Bakucs et al (, ), who analyzed market structure in the Hungarian raw milk and the German and Hungarian slaughtered hogs market, respectively.…”

Section: Introductionmentioning

confidence: 99%

“…In particular, the results of Hockmann and Vöneki () for the Hungarian raw milk market indicate that the abolition of export subsidies in 2004 led to considerable market distortions and that processors were able to exercise oligopsony power.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Regional‐Level Analysis of Oligopsony Power in the Ukrainian Dairy Industry

Perekhozhuk

Glauben

Teuber

et al. 2014

Canadian J Agri Economics

View full text Add to dashboard Cite

Transition was characterized by massive structural changes in most economic sectors in Ukraine. This is especially true for the dairy sector. Several countervailing developments took place under transition that affected the dairy industry. Interregional trade became feasible, the importance of milk delivered by households increased significantly, and most dairies became investor-owned companies. The latter point and the fact that the Antimonopoly Committee of Ukraine detected several price cartels in the industry lead us to offer that after transition, dairies were able to exercise oligopsony power toward dairy producers at the regional level. This paper estimates market structure models for raw milk in Ukraine using a translog production function for the processing sector at the national and regional level. The results suggest the existence of oligopsony power in three of 25 administrative regions in Ukraine, coupled with a potential deviation of procurement prices for raw milk from the value marginal product of raw milk ranging from 24.6% to 49.4%. En Ukraine, la transition a entraîné des changements structurels profonds dans la plupart des secteurś economiques, et plus particulièrement dans le secteur laitier. Au cours de cette transition, plusieurs mesures ontété mises en place, mais leurs répercussions sur l'industrie laitière n'ont pas toutesété bénéfiques. Le commerce interrégional est devenu possible, la quantité de lait livrée par les fermes s'est accrue considérablement et la plupart des laiteries sont devenues des sociétés par actions. Le fait que les laiteries soient devenues des sociétés par actions et que le Comité antimonopole de l'Ukraine(Antimonopoly Committee of Ukraine) ait détecté plusieurs cartels de prix au sein de l'industrie nous porteà dire qu'après la transition, les laiteries ontété en mesure d'exercer un pouvoir d'oligopsone au détriment des producteurs laitiersà l'échelle régionale. Le présent articleévalue les modèles de structure de marché du lait cru en Ukraine,à l'aide d'une fonction de production translog pour le secteur de la transformationà l'échelle nationale et régionale. Les résultats montrent l'existence du pouvoir oligopsone dans trois des vingt-cinq régions administratives de l'Ukraine, ainsi qu'unécart entre les prix versés pour l'approvisionnement en lait cru et la valeur du produit marginal du lait cru, unécart qui pourrait varier de 24,6 %à 49,4 %.

show abstract

Collusion in the Hungarian Market for Raw Milk

Cited by 14 publications

References 8 publications

Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector

Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector

Approaches and Methods for the Econometric Analysis of Market Power: A Survey and Empirical Comparison

Regional‐Level Analysis of Oligopsony Power in the Ukrainian Dairy Industry

Contact Info

Product

Resources

About