The Impact of Non-constant Return and Market Power on the Determination of Farm Value Share

Xian Xin and Xiuqing Wang

No 903, Working Papers from China Agricultural University, College of Economics and Management

Abstract: This paper investigates the impacts of non-constant return to scale, oligopsony power, and oligopoly power on farm value share with the approach of equilibrium displacement model. Our paper contrasts to the current literature that non-constant return to scale, oligopoly power, and oligopsony power are all incorporated into one generalized model which enables us to investigate the impacts of these three factors on the determination and changes of farm value share systematically. Our results imply that non-constant return to scale and market power is central to the understanding of farm value share. These in turn indicate that overlooking the impacts of market power and degree of return to scale may overestimate or underestimate the impacts of exogenous shocks on the changes on farm value share.

Keywords: Farm Value Share; Market Power; Non-constant Returns to Scale (search for similar items in EconPapers)
JEL-codes: L11 Q10 Q13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2009-05
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http://www.cau.edu.cn/cem/news/newsfj/2009E003.pdf First version, 2009 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cau:wpaper:0903

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