Market Power and/or Efficiency: An Application to U.S. Food Processing

Rigoberto Lopez, Azzeddine Azzam and Carmen Liron-Espana

No 60, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article separates oligopoly-power and cost-efficiency effects of changes in industrial concentration and assesses their impact on output prices in 32 food-processing industries. Empirical results indicate that although concentration induces cost efficiency in one-third of the industries, oligopoly-power effects either dominate cost efficiency or reinforce inefficiency, resulting in higher output prices in most industries. The article also provides fresh econometric estimates of oligopoly power and economies of size for the industries in question.

Keywords: industrial concentration; economies of scale; industrial organization; oligopoly power; food processing; Agribusiness; Industrial Organization; Productivity Analysis; L00; L11; L13; L66 (search for similar items in EconPapers)
Date: 2001
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Working Paper: Market Power and/or Efficiency: An Application to U.S. Food Processing (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:060

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