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Scale Effects and Mark‐ups in the US Food and Fibre Industries: Capital Investment and Import Penetration Impacts

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  • Catherine J. Morrison Paul

Abstract

Capital investment patterns and import penetration are often alleged to influence firms' costs and prices, and thus economic performance. We examine the impacts of these factors on measures of scale economies, input demand/composition, and market power in the US food and fibre industries. Flexible variable cost functions incorporating quasi‐fixity of three categories of private (internal) capital and two external technological and trade (import) factors represent the cost structures of the two industries. Pricing equations, based on inverse demand functions including import prices, represent output decisions. Cost and demand elasticities constructed from this model indicate reduced manufacturing costs from technical and trade, scale and capital effects. This increased cost efficiency arises largely from materials savings in the textiles industry and reduced labour use in the food industry. Mark‐up behaviour is exhibited for most of the sample period in the textiles industry, and neither industry appears heavily affected by import prices.

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  • Catherine J. Morrison Paul, 1999. "Scale Effects and Mark‐ups in the US Food and Fibre Industries: Capital Investment and Import Penetration Impacts," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 64-82, January.
    • Handle: RePEc:bla:jageco:v:50:y:1999:i:1:p:64-82
    DOI: 10.1111/j.1477-9552.1999.tb00795.x
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    Cited by:

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    2. Theofanis Papageorgiou & Panayotis G. Michaelides & John G. Milios, 2011. "Technology and economic fluctuations in the US food sector (1958‐2006)," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 38(2), pages 140-164, January.
    3. Unterschultz, James R. & Jeffrey, Scott R. & Quagrainie, Kwamena K., 2000. "Value-Adding 20 Billion By 2005: Impact At The Alberta Farm Gate," Project Report Series 24049, University of Alberta, Department of Resource Economics and Environmental Sociology.
    4. Ollinger, Michael, 2008. "Structural Change in the Meat and Poultry Industry and the Pathogen Reduction Hazard Analysis Critical Control Point Rule," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 36747, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Rahman, Mohammad Chhiddikur, 2020. "Welfare Impact of Asymmetric Price Transmission on Bangladesh Rice Consumers," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 242248, January.
    6. Rahman, Mohammad Chhiddikur, 2018. "Welfare Impact of Asymmetric Price Transmission on Bangladesh Rice Consumers," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 251114, January.
    7. Hossain, Ferdaus & Jain, Ruchi, 2001. "Financial Structure, Production and Productivity Growth in U.S. Food Manufacturing Industry," 2001 Annual meeting, August 5-8, Chicago, IL 20756, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    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.

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