Globalization in the food industry: The impact of market structures and firm strategies

A. van Witteloostuijn

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

The author examines whether ownership and increased competitive pressure affect food retailers’ market power, analyzing whether all actors involved in the food supply chain deviate from the pricing behavior that exists under perfect competition. A method proposed by Roeger (1995) is used to estimate monopoly and monopsony market power, relaxing the assumptions of perfect competition and constant returns to scale, and avoiding any endogeneity issues. The results obtained indicate that foreign investments and consolidation have a positive and significant impact on food processors’ and retailers’ mark-ups. Food processors, agricultural producers, and wholesalers have lower price-cost margins than retailers, whereas retailers exert monopsonistic power in the upstream food market as well. The results are robust for various estimation techniques and specifications.
Original languageEnglish
Title of host publicationThe Food Economy
Subtitle of host publicationGlobal Issues and Challenges
EditorsF. Bunte, H. Dagevos
Place of PublicationWageningen
PublisherWageningen Academic Publishers
Pages23-42
Publication statusPublished - 2010

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Firm strategy
Retailers
Food industry
Market structure
Globalization
Food
Market power
Perfect competition
Food supply
Ownership
Markups
Monopoly
Endogeneity
Foreign investment
Wholesalers
Returns to scale
Consolidation
Price-cost margin
Pricing behaviour
Supply chain

Cite this

van Witteloostuijn, A. (2010). Globalization in the food industry: The impact of market structures and firm strategies. In F. Bunte, & H. Dagevos (Eds.), The Food Economy: Global Issues and Challenges (pp. 23-42). Wageningen: Wageningen Academic Publishers.
van Witteloostuijn, A. / Globalization in the food industry : The impact of market structures and firm strategies. The Food Economy: Global Issues and Challenges. editor / F. Bunte ; H. Dagevos. Wageningen : Wageningen Academic Publishers, 2010. pp. 23-42
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van Witteloostuijn, A 2010, Globalization in the food industry: The impact of market structures and firm strategies. in F Bunte & H Dagevos (eds), The Food Economy: Global Issues and Challenges. Wageningen Academic Publishers, Wageningen, pp. 23-42.

Globalization in the food industry : The impact of market structures and firm strategies. / van Witteloostuijn, A.

The Food Economy: Global Issues and Challenges. ed. / F. Bunte; H. Dagevos. Wageningen : Wageningen Academic Publishers, 2010. p. 23-42.

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

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AB - The author examines whether ownership and increased competitive pressure affect food retailers’ market power, analyzing whether all actors involved in the food supply chain deviate from the pricing behavior that exists under perfect competition. A method proposed by Roeger (1995) is used to estimate monopoly and monopsony market power, relaxing the assumptions of perfect competition and constant returns to scale, and avoiding any endogeneity issues. The results obtained indicate that foreign investments and consolidation have a positive and significant impact on food processors’ and retailers’ mark-ups. Food processors, agricultural producers, and wholesalers have lower price-cost margins than retailers, whereas retailers exert monopsonistic power in the upstream food market as well. The results are robust for various estimation techniques and specifications.

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van Witteloostuijn A. Globalization in the food industry: The impact of market structures and firm strategies. In Bunte F, Dagevos H, editors, The Food Economy: Global Issues and Challenges. Wageningen: Wageningen Academic Publishers. 2010. p. 23-42