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Further Evidence on Competition in U.S. Grain Export Trade

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  • Patterson, Paul M.
  • Abbott, Philip C.

Abstract

This study analyzes the relationship between export market structure and the pricing behavior of U.S. grain exporting firms. A generalized theoretical model that specifies the Lerner index as a function of the Herfindahl-Hirschman index, market specific own-price elasticities of demand, and other market structure and control variables is used. The hypotheses proposed in the study are tested by OLS regression analysis using pooled cross-sectional, time series data sets for U.S. wheat and corn exports. Strong evidence suggesting that market structure does affect the pricing behavior of U.S. wheat exporting firms was found. Specifically, where export concentration is high, demand is strong, or foreign buyers have less market power, the markup on export price over domestic price is higher. Weaker evidence of systematic export price discrimination was found for corn.

Suggested Citation

  • Patterson, Paul M. & Abbott, Philip C., 1992. "Further Evidence on Competition in U.S. Grain Export Trade," Occasional Papers 233081, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    • Handle: RePEc:ags:nc194o:233081
    DOI: 10.22004/ag.econ.233081
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    Cited by:

    1. Philip C. Abbott & Panu K. S. Kallio, 1996. "Implications of Game Theory for International Agricultural Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 738-744.
    2. Gafarova, Gulmira & Perekhozhuk, Oleksandr & Glauben, Thomas, 2015. "Price discrimination and pricing-to-market behavior of Black Sea region wheat exporters," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 47(3), pages 287-316.
    3. Wilson, William W. & Dahl, Bruce L., 1999. "Transnational Grain Firms: Evolution And Strategies In North America," Agricultural Economics Reports 23278, North Dakota State University, Department of Agribusiness and Applied Economics.
    4. Esperanza Gracia, 1999. "Márgenes y cuotas de mercado. Un análisis con un micropanel," Investigaciones Economicas, Fundación SEPI, vol. 23(3), pages 393-428, September.
    5. Soregaroli, Claudio & Sckokai, Paolo, 2011. "Modelling Agricultural Commodity Markets under Imperfect Competition," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116012, European Association of Agricultural Economists.
    6. Nitish Jain & Karan Girotra & Serguei Netessine, 2014. "Managing Global Sourcing: Inventory Performance," Management Science, INFORMS, vol. 60(5), pages 1202-1222, May.
    7. McCorriston, Steve & MacLaren, Donald, 2005. "Single-desk state trading exporters," European Journal of Political Economy, Elsevier, vol. 21(2), pages 503-524, June.
    8. McCorriston, Steve & MacLaren, Donald, 2001. "The Trade Distorting Effect Of Single-Desk State Trading Exporters," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125790, Australian Agricultural and Resource Economics Society.
    9. Bowen Zheng & Mengjie Zhang & Xuefang Zhang, 2022. "The rise of market power and firms' investment: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(5), pages 4807-4830, December.
    10. Reimer, Jeffrey J. & Stiegert, Kyle W., 2006. "Evidence on Imperfect Competition and Strategic Trade Theory," Staff Paper Series 498, University of Wisconsin, Agricultural and Applied Economics.
    11. Margherita Scoppola, 2007. "Economies of scale and market structure in international grain trade," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 277-291, September.

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