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Is Foreign Trade (Im)Perfectly Competitive?: An Analysis Of The German Market For Banana Imports

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  • Satish Y. Deodhar
  • Ian M. Sheldon

Abstract

Many studies have been carried out that measure welfare effects of the newly adoped common policy on banana imports by the European Union. All these studies assume that foreign trade in bananas is characterised by perfectly competitive behaviour. However, if foreign trade in bananas is imperfectly competitive, then the welfare predictions about the common banana policy may turn out to be incorrect. It is necessary, therefore, to empirically estimate the degree of market imperfection in the banana market. In this paper, we estimate the degree of market imperfection in the German market for banana imports using a structural econometric model. Based on the bootstrap procedure, we reject the hypothesis that firms in this market behave perfectly competitively, but cannot reject the hypothesis that firms are engaged in Cournot‐Nash behaviour.

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  • Satish Y. Deodhar & Ian M. Sheldon, 1995. "Is Foreign Trade (Im)Perfectly Competitive?: An Analysis Of The German Market For Banana Imports," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(3), pages 336-348, September.
    • Handle: RePEc:bla:jageco:v:46:y:1995:i:3:p:336-348
    DOI: 10.1111/j.1477-9552.1995.tb00780.x
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    3. Fofana, Abdulai & Jaffry, Shabbar, 2006. "Measuring Market Power in the UK Retail Salmon Industry," Working Papers 45873, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    4. Deodhar, Satish Y. & Sheldon, Ian M., 1996. "Estimation Of Imperfect Competition In Food Marketing: A Dynamic Analysis Of The German Banana Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 27(3), pages 1-10, October.
    5. Weiss, Christoph, 2020. "Preisbildung bei unvollkommener Konkurrenz," IAMO Discussion Papers 305467, Institute of Agricultural Development in Transition Economies (IAMO).
    6. Deodhar, Satish Y., 1999. "WTO Agreements and Indian Agriculture: Retrospection and Prospects," IIMA Working Papers WP1999-11-06, Indian Institute of Management Ahmedabad, Research and Publication Department.
    7. Roland Herrmann & Marc Kramb & Christina Mönnich, 2001. "Tariff rate quotas and the economic impact of agricultural trade liberalization in the world trade organization," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(1), pages 1-19, February.
    8. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109, March.
    9. Perekhozhuk, Oleksandr & Chezhia, Giorgi & Glauben, Thomas, 2021. "Measuring Oligopsony Market Power in Kazakh Grain-Processing Industry: Converging Evidence from Two Structural Approaches," 2021 Conference, August 17-31, 2021, Virtual 315345, International Association of Agricultural Economists.
    10. Alexandre Gohin & Hervé Guyomard, 2000. "Measuring Market Power for Food Retail Activities: French Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 181-195, May.
    11. Alexandre Gohin & Herve Guyomard & . Esr. Département d'Economie Et Sociologie Ruralesdijon, 1997. "Measuring market power for food retail activities : French evidence [Mesure du pouvoir de marché de l'activité alimentaire de détail en France]," Post-Print hal-02839368, HAL.
    12. Anania, Giovanni & Scoppola, Margherita, 2014. "Modeling trade policies under alternative market structures," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 185-206.
    13. Kamerschen, David R. & Klein, Peter G. & Porter, David V., 2005. "Market structure in the US electricity industry: A long-term perspective," Energy Economics, Elsevier, vol. 27(5), pages 731-751, September.
    14. Neukirch Arne & Wein Thomas, 2019. "Price Gouging at the Pump? The Lerner Index and the German Fuel Market," Review of Economics, De Gruyter, vol. 70(2), pages 157-192, August.
    15. Kox, Henk L.M., 1998. "Welfare gains from liberalized banana trade and a new international banana agreement," Serie Research Memoranda 0012, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. Franz Sinabell, 2005. "Marktspannen und Erzeugeranteil an den Ausgaben für Nahrungsmittel," WIFO Studies, WIFO, number 25398, March.
    17. Sekhar, C. S. C., 2003. "Price formation in world wheat markets -- implications for policy," Journal of Policy Modeling, Elsevier, vol. 25(1), pages 85-106, January.
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