A Slaughterhouse Oligopsony: An Empirical Assessment of Market Power
Main Article Content
Abstract
This paper analyzes the beef supply chain in Brazil with the purpose of identifying the existence of market power between farmers and slaughterhouses. The study is divided in two parts. First, we characterize the beef sector in Brazil, and conclude that the industry structure is close to a oligopsony. Following the tradition of the New Empirical Industrial Organization (NEIO), we then proceed to apply an econometric test to detect market power. This new method tries to overcome the usual limitations in which the results obtained are sensitive to assumptions about production technology. Using profit maximization conditions for slaughterhouses, and a time series of monthly data over a period of 14 years from the state of Sao Paulo, we found evidence of weak to moderate market power in the relationship between slaughterhouses and producers. Robustness checks through alternative models only confirmed these results. Also, we did not find evidence that market power has increased any in recent years, during which the industry concentration ratio has increased substantially.
Downloads
Article Details
How to Cite
Moita, R. M., & Golon, L. A. (1). A Slaughterhouse Oligopsony: An Empirical Assessment of Market Power. Journal of Contemporary Administration, 18(6), 772-794. https://doi.org/10.1590/1982-7849rac20141196
Section
Articles
Since mid-February of 2023, the authors retain the copyright relating to their article and grant the journal RAC, from ANPAD, the right of first publication, with the work simultaneously licensed under the Creative Commons Attribution 4.0 International license (CC BY 4.0), as stated in the article’s PDF document. This license provides that the article published can be shared (allows you to copy and redistribute the material in any medium or format) and adapted (allows you to remix, transform, and create from the material for any purpose, even commercial) by anyone.
After article acceptance, the authors must sign a Term of Authorization for Publication, which is sent to the authors by e-mail for electronic signature before publication.