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Norwegian export of farmed salmon − trade costs and market concentration

Author

Listed:
  • Frank Asche
  • Ivar Gaasland
  • Hans-Martin Straume
  • Erling Vårdal

Abstract

While variation in unit value most commonly has been associated with quality in the trade literature, observed differences in prices between markets might also be explained by variation in market concentration and the degree of competition. Using transaction data on Norwegian exports of salmon, we introduce a Herfindahl index as a measure of competition in a standard gravity model. We find that competition typically is weaker in small and distant markets that due to high trade costs are served by relatively few firms. We argue that the anti-competitive impact of trade costs may explain price differentiation between markets even for homogeneous products.

Suggested Citation

  • Frank Asche & Ivar Gaasland & Hans-Martin Straume & Erling Vårdal, 2020. "Norwegian export of farmed salmon − trade costs and market concentration," Applied Economics Letters, Taylor & Francis Journals, vol. 27(2), pages 145-149, January.
    • Handle: RePEc:taf:apeclt:v:27:y:2020:i:2:p:145-149
    DOI: 10.1080/13504851.2019.1610702
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    References listed on IDEAS

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    1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
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    More about this item

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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