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The structural effect of cooperatives on price volatility in the European dairy sector

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  • Malte Müller
  • Markus Hanisch
  • Agustina Malvido
  • Jens Rommel
  • Julian Sagebiel

Abstract

Theoretical models and empirical evidence suggest that high market shares of cooperatives can force investor-oriented firms to pay higher producer prices within a region. In the same vein, cooperatives may force investor-oriented firms to reduce price volatility. We use panel data from 27 European Union member states over the period 2001–2015 to investigate how the market share of cooperatives in a country affects milk price volatility. Our key finding is that a higher market share of cooperatives reduces price volatility at the national level. Volatility is influenced by a number of other variables, such as fluctuation in raw milk production, oil price volatility spillover and the number of dairy processors. Policymakers should consider that the promotion of cooperatives might positively affect price stability in the dairy sector.

Suggested Citation

  • Malte Müller & Markus Hanisch & Agustina Malvido & Jens Rommel & Julian Sagebiel, 2018. "The structural effect of cooperatives on price volatility in the European dairy sector," Applied Economics Letters, Taylor & Francis Journals, vol. 25(8), pages 576-579, May.
    • Handle: RePEc:taf:apeclt:v:25:y:2018:i:8:p:576-579
    DOI: 10.1080/13504851.2017.1346358
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    Cited by:

    1. Hyejin Lee & Johan Swinnen & Patrick Van Cayseele, 2021. "Market power and the volatility of markups in the food value chain: the role of Italian cooperatives," Working Papers of LICOS - Centre for Institutions and Economic Performance 674093, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    2. Damien Rousselière, 2019. "A Flexible Approach to Age Dependence in Organizational Mortality: Comparing the Life Duration for Cooperative and Non-Cooperative Enterprises Using a Bayesian Generalized Additive Discrete Time Survi," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 829-855, December.
    3. Pardeshi, Shefali & Loughrey, Jason & O’Connor, Declan, 2024. "Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344291, International Association of Agricultural Economists (IAAE).
    4. repec:lic:licosd:42421 is not listed on IDEAS

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