nep-ind New Economics Papers
on Industrial Organization
Issue of 2008‒11‒18
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing By Maican, Florin; Orth, Matilda
  2. The Biotechnology Sector: "Bounds" to Market Structure By SHELDON, Ian
  3. Further Evidence of Price Transmission and Asymmetric Adjustment in the U.S. Beef and Pork Sectors By Boetel, Brenda L.; Liu, Donald J.
  4. Demand Analysis for Shrimp in the United States By Zhou, Xia (Vivian); Shaik, Saleem
  5. DETERMINANTS OF ARGENTINEAN WINE PRICES IN THE U.S. MARKET By San Martin, Guillermo S.; Brummer, Bernhard; Troncoso, Javier L.

  1. By: Maican, Florin (Department of Economics, School of Business, Economics and Law, Göteborg University); Orth, Matilda (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Entry of large (“big-box”) stores along with a drastic fall in the total number of stores is a striking trend in retail markets. In this paper we provide a dynamic structural model, controlling for unobserved prices and local market characteristics, to estimate total factor productivity in retail markets. Then we evaluate how increased competition from large entrants influences incumbents’ productivity in local markets. Using detailed data on retail food stores in Sweden, we find that net entry substantially contributes to industry productivity growth. In local markets, productivity dispersion increases as a consequence of large entrants, i.e., low productive incumbents become less productive whereas high productive incumbents become more productive. We conclude that large entrants play a central role in explaining productivity differences across stores.
    Keywords: Retail markets; Imperfect competition; Industry dynamics; TFP; Space productivity; Dynamic structural model
    JEL: C24 L11 O30
    Date: 2008–11–12
  2. By: SHELDON, Ian
    Abstract: This paper examines whether it makes sense to consider Sutton's "bounds" approach as a candidate theory for explaining the recent evolution of market structure in the biotechnology sector, and to speculate whether market structure will change if the industry begins to introduce second-generation GM products that are of more direct benefit to consumers. A key result is that the market structure is bounded in the presence of endogenous sunk costs, implying care should be taken when inferring any correlation between R&D expenditure and seller concentration in the biotechnology sector.
    Keywords: Biotechnology, market structure, Research and Development/Tech Change/Emerging Technologies, L1, L11,
    Date: 2008
  3. By: Boetel, Brenda L.; Liu, Donald J.
    Abstract: This paper expands the contributions of Goodwin and Holt (AJAE, 1999) and Goodwin and Harper (J. of Ag. and Appl. Econ., 2000), GHH henceforth, who analyze retail-wholesale-farm price transmissions in the U.S. beef and pork industries using weekly data. First, in light of advancements in unit root tests, we re-examine in a more comprehensive manner GHH€ٳ conclusion that the weekly U.S. cattle/beef and hog/pork price series are nonstationary. The conventional augmented Dickey-Fuller test that GHH adopt has low power in discriminating against the unit root null because it does not entertain the possibility of a structure break in the deterministic trend function. Second, we examine more closely the estimation procedure surrounding the long run price linkage equation, ensuring the unbiasedness in the estimated long run price transmission coefficient. Moreover, we ascertain whether there have been structural changes in the long run price linkage equation using a new approach, which endogenously estimates the break date. Third, we employ two data sets with different frequencies, weekly data and monthly data, to gain insight into the reasons underlying price asymmetry found in GHH.
    Keywords: Livestock Production/Industries, Research Methods/ Statistical Methods,
    Date: 2008
  4. By: Zhou, Xia (Vivian); Shaik, Saleem
    Abstract: This paper analyzes the demand for shrimp along with beef, pork, and chicken in the US food market, which contributes much to predicting supply strategies, consumer preferences and policy making. It focuses on the own and cross relationship between the expenditure share and price, income changes. An Almost Ideal Demand System (AIDs) model and two alternative specifications are used to estimate a system of expenditure share equations for shrimp, beef, pork, and chicken. Empirical results indicated that some insignificant slope coefficients and inappropriate signs of them did not comply with microeconomic theory. This could be caused by heteroscedasticity, autocorrelation, a limitation in the data used, or shrimp is a commodity that is quite different.
    Keywords: expenditure share, own and cross relationship, Almost Ideal Demand System (AIDs), heteroscedasticity, and autocorrelation, Demand and Price Analysis,
    Date: 2008
  5. By: San Martin, Guillermo S.; Brummer, Bernhard; Troncoso, Javier L.
    Abstract: A hedonic price function for Argentinean wines in the U.S market is estimated in order to evaluate the effect of the most important attributes of wine on price. Results show that labeling practices and the choice of the right wine quality attributes are far more influential on price than expert panel opinions or oenological wine improvements such as aging.
    Keywords: wine prices, Argentinean wine, hedonic price model, Demand and Price Analysis,
    Date: 2008–04

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