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Assessment Of Market Power And Cost Efficiency Effects In The U.S. Beef Packing Industry

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  • Ji, Inbae
  • Chung, Chanjin

Abstract

This paper examines the simultaneous impacts of horizontal concentration and vertical integration on oligopoly & oligopsony power and cost efficiency in the U.S. beef packing industry, using both static and time varying empirical industrial organization models. Two separate sources of market power are considered: concentration and the captive supply market. Empirical results show the presence of market power in both beef retail and cattle procurement markets, and that the market power exertion in these markets is positively affected by concentration and captive supply, respectively. The results also show that the market power exertion drastically decreases after the implementation of livestock mandatory price reporting. Finally, our study finds that the market power effect is outweighed by the cost efficiency effect due to the increasing concentration and captive supply.

Suggested Citation

  • Ji, Inbae & Chung, Chanjin, 2016. "Assessment Of Market Power And Cost Efficiency Effects In The U.S. Beef Packing Industry," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 39(Special, ), pages 1-24, December.
    • Handle: RePEc:ags:jordng:251928
    DOI: 10.22004/ag.econ.251928
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    References listed on IDEAS

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    Cited by:

    1. Minseong Kang & Byeong‐Il Ahn, 2023. "Market power and cost‐efficiency effects: Broiler packing industry in South Korea," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1157-1172, October.

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    Livestock Production/Industries;

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