Industrial Organization as a Determinant of International Competitiveness in Food

Abstract

International trade is increasingly being viewed in the context of imperfect competition. This is particularly appropriate for food and other processed agricultural products as most food processing and manufacturing industries are oligopolistic. Industrial organization theory demonstrates· a negative relationship between concentration of market power and · domestic market performance. One theme emerging from the integration of industrial organization and international trade theories is, seller concentration is also negatively related to international market performance. This theme is tested, and validated for U.S. food manufacturing industries.