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Impact of Chinese acquisition of a US Company on Consumer Willingness to Pay

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  • Zhang, Yu Yvette
  • Palma, Marco A.
  • Jin, Shaosheng

Abstract

In this study, we explore how the acquisition of Smithfield, the world’s larger pork producer, by a Chinese firm Shuanghui, on consumers’ WTP to meat product using experimental auctions. Our results indicate that the acquisition benefits Shuanghui in particular and other Chinese firms in general in terms of consumer’s willingness to pay. On the other firms, the general impacts on US firms might be negative, probably due to expected lower price or reduced perceived difference between domestic and imported meat products.

Suggested Citation

  • Zhang, Yu Yvette & Palma, Marco A. & Jin, Shaosheng, 2015. "Impact of Chinese acquisition of a US Company on Consumer Willingness to Pay," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205811, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205811
    DOI: 10.22004/ag.econ.205811
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    References listed on IDEAS

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    1. Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2004. "Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 725-741, December.
    2. Nils Herger & Christos Kotsogiannis & Steve McCorriston, 2008. "Cross-border acquisitions in the global food sector," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(4), pages 563-587, December.
    3. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
    4. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, September.
    5. Bhagat, Sanjai & Malhotra, Shavin & Zhu, PengCheng, 2011. "Emerging country cross-border acquisitions: Characteristics, acquirer returns and cross-sectional determinants," Emerging Markets Review, Elsevier, vol. 12(3), pages 250-271, September.
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    Cited by:

    1. Zhang, Yu Yvette & Palma, Marco A. & Jin, Shaosheng & Yuan, Xiaotong, 2016. "Investigating the US Consumer Response to the Chinese Acquisition of a US Firm," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236024, Agricultural and Applied Economics Association.
    2. Yu Yvette Zhang & Marco A. Palma & Shaosheng Jin & Xiaotong Yuan, 2019. "US consumer reactions to China's Shuanghui acquisition of Smithfield Foods and its neural basis," Agribusiness, John Wiley & Sons, Ltd., vol. 35(1), pages 69-83, January.

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    Keywords

    Agribusiness; Consumer/Household Economics; Marketing;
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