State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets

Fengxia Dong, Thomas L. Marsh and Kyle W. Stiegert

American Journal of Agricultural Economics, 2006, vol. 88, issue 1, pages 90-103

Abstract: This study tested if the exclusive procuring and pricing policies of two state trading enterprises (STEs) in international malting barley markets could be used in a strategic trade context. The research provided four key findings. First, the global malting barley market operated in a quantity-setting oligopolistic structure during the study years. Second, both STEs and other exporting countries were in Cournot competition and thus made available strategic trade possibilities. Third, initial commodity payments were too high to generate a rent-shifting outcome. Fourth, product differentiation was confirmed, which may have dampened the desire/ability of STEs to pursue a rent-shifting objective. Copyright 2006, Oxford University Press.

Date: 2006
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