IDEAS home Printed from https://ideas.repec.org/a/ids/ijtrgm/v10y2017i2-3p251-266.html
   My bibliography  Save this article

Does the USA have market power in importing ethanol from Brazil?

Author

Listed:
  • Sunil P. Dhoubhadel
  • Azzeddine M. Azzam
  • Matthew C. Stockton

Abstract

With the ever increasing requirement in the USA to blend higher volumes of advanced biofuels with gasoline and the shortfall in domestic production to fulfil this requirement, imports of ethanol from Brazil will likely take on an even more vital role. In this paper, we examine US buyer power over Brazil. For methodology, we estimate the sugarcane ethanol residual supply function facing the USA. We find that while the USA had buyer power before the enactment of the advanced biofuels mandate, that buyer power disappeared after the mandate. One possible explanation is that, given that Brazil is the primary source of the sugarcane ethanol, the mandate requirement has increased rivalry between the USA and the remaining importers, creating a perfect market overlap between the rivals.

Suggested Citation

  • Sunil P. Dhoubhadel & Azzeddine M. Azzam & Matthew C. Stockton, 2017. "Does the USA have market power in importing ethanol from Brazil?," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 10(2/3), pages 251-266.
    • Handle: RePEc:ids:ijtrgm:v:10:y:2017:i:2/3:p:251-266
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=86061
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. de Gorter, Harry & Just, David R. & Tan, Qinwen, 2009. "The Socially Optimal Import Tariff and Tax Credit for Ethanol with Farm Subsidies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(1), pages 1-13, April.
    2. Asche, Frank & Nøstbakken, Linda & Tveterås, Sigbjørn, 2009. "When will trade restrictions affect producer behavior: Oligopsony power in international trade," UiS Working Papers in Economics and Finance 2009/20, University of Stavanger.
    3. Baker, Jonathan B. & Bresnahan, Timothy F., 1988. "Estimating the residual demand curve facing a single firm," International Journal of Industrial Organization, Elsevier, vol. 6(3), pages 283-300.
    4. Yano, Yuki & Blandford, David & Surry, Yves R., 2010. "The Implications of Alternative U.S. Domestic and Trade Policies for Biofuels," 84th Annual Conference, March 29-31, 2010, Edinburgh, Scotland 91832, Agricultural Economics Society.
    5. de Gorter Harry & Just David R, 2008. "The Economics of the U.S. Ethanol Import Tariff with a Blend Mandate and Tax Credit," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(2), pages 1-23, December.
    6. Devadoss, Stephen & Kuffel, Martin, 2010. "Is the U.S. Import Tariff on Brazilian Ethanol Justifiable?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-13, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen Devadoss & Jude Bayham, 2013. "US Ethanol Trade Policy: Pollution Reduction or Domestic Protection," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 568-584, August.
    2. McPhail, Lihong Lu & Babcock, Bruce A., 2012. "Impact of US biofuel policy on US corn and gasoline price variability," Energy, Elsevier, vol. 37(1), pages 505-513.
    3. Devadoss, Stephen & Kuffel, Martin, 2010. "Is the U.S. Import Tariff on Brazilian Ethanol Justifiable?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-13, December.
    4. Devadoss, Stephen & Kuffel, Martin, 2010. "Ethanol Trade between Brazil and the United States," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 60889, Agricultural and Applied Economics Association.
    5. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    6. Alessandro Bonanno & Rigoberto A. Lopez, 2008. "Wal-Mart’s Monopsony Power in Local Labor Markets," Food Marketing Policy Center Research Reports 103, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    7. Gual, Jordi, 2003. "Market Definition in the Telecoms Industry," CEPR Discussion Papers 3988, C.E.P.R. Discussion Papers.
    8. Stenborg, Markku, 2002. "Economics of Joint Dominance," Discussion Papers 834, The Research Institute of the Finnish Economy.
    9. Austan Goolsbee & Chad Syverson, 2023. "Monopsony Power in Higher Education: A Tale of Two Tracks," Journal of Labor Economics, University of Chicago Press, vol. 41(S1), pages 257-290.
    10. Katsoulacos Yannis & Konstantakopoulou Ioanna & Metsiou Eleni & Tsionas Efthymios, 2014. "Quantitative Price Tests in Antitrust Market Definition with an Application to the Savory Snacks Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 1-33, January.
    11. Garcia, Angel & Jaumandreu, Jordi & Rodriguez, Cesar, 2004. "Innovation and jobs: evidence from manufacturing firms," MPRA Paper 1204, University Library of Munich, Germany.
    12. Bowser, William & Khanna, Madhu & Onal, Hayri, 2010. "Spatial Equilibrium in the Bio-Fuel Economy: A Multi-Market Analysis of Trade Distortions in the U.S. and Brazilian Ethanol Sector," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61636, Agricultural and Applied Economics Association.
    13. Nakajima, Toru, 2012. "Estimating Time Variation of Market Power: Case of U.S. Soybean Exports," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124775, Agricultural and Applied Economics Association.
    14. Kallfaß, Hermann H., 1996. "Konzepte und Indikatoren zur Abgrenzung räumlicher Märkte in der europäischen Zusammenschlußkontrolle," Ilmenau Economics Discussion Papers 7, Ilmenau University of Technology, Institute of Economics.
    15. Mahanaseth Itthipong & Tauer Loren W., 2014. "Thailand’s Market Power in Its Rice Export Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 109-120, January.
    16. Walls, W.D. & Rusco, Frank & Kendix, Michael, 2011. "Biofuels policy and the US market for motor fuels: Empirical analysis of ethanol splashing," Energy Policy, Elsevier, vol. 39(7), pages 3999-4006, July.
    17. Gilbert, Richard J & Newberry, David M, 2006. "Electricity Merger Policy in the Shadow of Regulation," Department of Economics, Working Paper Series qt7bh5f7rn, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    18. Sergio Aquino de Souza & Eduardo Pontual Ribeiro & Gerson Carvalho, 2010. "Documento de Trabalho 01/2010 - Delimitação de Mercado Relevante," Documentos de Trabalho 12010, Conselho Administrativo de Defesa Econômica (Cade), Departamento de Estudos Econômicos.
    19. Steen, Frode & Salvanes, Kjell G., 1999. "Testing for market power using a dynamic oligopoly model," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 147-177, February.
    20. Farrell Joseph & Shapiro Carl, 2010. "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-41, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijtrgm:v:10:y:2017:i:2/3:p:251-266. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=130 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.