Does Farm and Processing Industry Structure Matter for Price Transmission? Some Evidence From Transition Countries: A Comparison of Dairy Sectors in Hungary and Poland

Zoltan Bakucs (), Jan Falkowski () and Imre Fertő
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Zoltan Bakucs: Institute of Economics Research Centre for Economic and Regional Studies Hungarian Academy of Sciences
Jan Falkowski: Faculty of Economic Sciences University of Warsaw, Poland

No 1212, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: Rapid and thorough changes have recently taken place in dairy supply chain in the whole Central and Eastern Europe. Growing concerns have been expressed that these changes may negatively affect farmers' relative position towards downstream industry, due to market power exercised by the latter. In response to this, the present paper aims to investigate the price transmission mechanism in two countries from the region, namely Poland and Hungary and contrast the results with dairy market organisations specific for these countries. Using cointegrated vector autoregression and controlling for potential structural breaks, it is shown that Polish milk prices, as opposed to Hungarian ones, are characterised by short- and long-term asymmetries. We discuss a number of potential explanations supporting the empirical results. We consider, among others, differences between the dairy chain structures and the role of FDI.

Keywords: price transmission; dairy sector; Hungary; Poland (search for similar items in EconPapers)
JEL-codes: D12 D4 Q13 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2012-03
New Economics Papers: this item is included in nep-agr and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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