 Economies of scale and endogenous market structures in international grain tradeNo 04-2007, Working Papers from Macerata University, Department of Studies on Economic Development (DiSSE) Abstract: The paper develops a two-stage duopoly model in which market structure is endogenous, as it is the outcome of the first stage of the game. The model considers a private firm and a State Trading Enterprise (STE) competing on a foreign market; the most important difference between the private firm and the STE is that while the STE makes use of external agents to export, the private firm may choose to vertically integrate downstream when transaction costs are large enough with respect to fixed costs. The game is solved for different modes of competition and under different assumptions regarding both homogenous and differentiated products. The results show that external shocks on export markets affecting the relative values of transaction and fixed costs may result in a change in market structures. The degree of product differentiation and the assumed mode of competition significantly affect the relative values of transaction and fixed costs at which the market sructure changes. Keywords: Multinational firm; international grain trade; State Trading Enterprises (search for similar items in EconPapers) Published in Agricultural Economics 37 (2007) 277-291 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mcr:wpaper:wpaper00004 Access Statistics for this paper More papers in Working Papers from Macerata University, Department of Studies on Economic Development (DiSSE) Contact information at EDIRC. |
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