Industry Organization and Output Size Distribution of Cotton Gins in the U.S

Maria Erlinda M. Mutuc and Darren Hudson

No 96676, Conference Papers from Texas Tech University, Department of Agricultural and Applied Economics

Abstract: With cotton output declining by 46 percent from 2005-2008 (from 23.89 M bales in 2005 to 12.8 M bales in 2008), gins are processing less cotton. This paper examines how output size distribution of cotton gins in the U.S. has evolved and the extent to which the developments in the U.S. ethanol industry, specifically the passage of the Energy Policy Act in 2005 (and its subsequent revisions), have influenced this structural process. Markov transitional probability matrices (TPMs) are estimated for two periods: 1994-2004 and 2005-2008 to determine changes in output size distribution of gins. TPMs indicate that relative to the pre-2005 period, gins had a greater propensity to process lower outputs after 2005. It is purported that in industries constrained by declining demand, bigger firms with excess capacity operate at higher costs than smaller firms that operate closer to their minimum efficient scale.

Keywords: Crop Production/Industries; Industrial Organization (search for similar items in EconPapers)
Date: 2010-02
New Economics Papers: this item is included in nep-agr
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/96676/files/Ind.Org.Gins.pdf (application/pdf)

Related works:
Working Paper: Industry Organization and Output Size Distribution of Cotton Gins in the U.S (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ttudco:96676

DOI: 10.22004/ag.econ.96676

Access Statistics for this paper

More papers in Conference Papers from Texas Tech University, Department of Agricultural and Applied Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().