Degree Of Market Concentration Research Articles

Structure and performance of cassava markets: challenges of food security and connecting small farmers to markets in Cameroon

Agrifood markets play a pivotal role in assuring national food security and improved welfare for smallholder farm families. However, the extent to which this is possible depends on the structure and performance of these markets. This study utilizes primary data collected from 326 cassava marketers operating in 15 markets to examine the structure and performance of the cassava market in Cameroon. We employ parametric and non-parametric techniques to determine the degree of market concentration and marketing performance of these cassava marketers. Our findings highlight a high market concentration with a Gini coefficient (GC) of 0.76 and 0.79 for wholesalers and retailers, respectively. This indicates that the cassava market is probably oligopolistic in structure. In addition, we reveal that average marketing efficiency is 14.20% and 87% for retailers and wholesalers, respectively. This indicates that retailers are relatively inefficient as compared to wholesalers. Furthermore, we observed that prices are set up in the markets according to the place of sale and the type of marketers. However, prices are influenced by factors such as transport, the quantity sold in on-spot markets, and the need for liquidity. In general, our results highlight that the region, type of marketer (wholesaler or retailer), and socio-economic factors account significantly for the variation of odds to participate in markets. Hence, to influence the dynamics of price on the consumers, it might be necessary to promulgate policies that could improve retailers' efficiency. This might be through the restructuring of retailers into cooperatives and associations which may permit retailers to access other critical resources.

Inequality and Market Concentration: New Evidence from Australia

Are excessively concentrated markets inequitable as well as inefficient? We explore this issue by analyzing the degree of market concentration in the industries where Australia's wealthiest made their fortunes. Compared with the economy at large, we find that top wealth holders have tended to make their fortunes in industries with a higher‐than‐average degree of market concentration. Top wealth shares have grown substantially, and from 1990 to 2020, there appears to have been an increase in the propensity of top wealth holders to make their fortunes in highly concentrated industries.

The COVID-19 pandemics and import demand elasticities: evidence from China’s customs data

We study China’s import demand elasticities using HS 8-digit customs data on China’s provincial imports during January 2019 to March 2021. It is found that both direct bilateral exchange rate elasticity and third-country exchange rate elasticity are affected by (1) policies that these Asian economies adopted to alleviate the adverse impacts of the COVID-19 pandemic and (2) the degree of concentration of exporters exporting a certain product to a certain Chinese provincial market. It is found that economic support policies will lower the bilateral exchange rate elasticity of trade flows, or even alter the sign of the bilateral exchange rate elasticity of China’s imports. Besides, the economic support policies can alleviate the pressure of foreign competition on exporters and make the exporters more resilient to the impacts of foreign competitors’ exchange rate depreciation. In contrast, the degree of market concentration of exporters in a certain provincial market affects the exchange rate and the third-country exchange rate elasticity differently. A higher market concentration lowers the bilateral exchange rate elasticity of trade flows but magnifies the impact of foreign competitors’ currency depreciation on exporters. These results are robust to alternative modes of trade, regional heterogeneity, product heterogeneity, various measures of policy responses to the pandemic, and alternative database.

The Economics of Scientific Publishing.

The peculiar nature of scientific publishing has allowed for a high degree of market concentration and a non-collusive oligopoly. The non-substitutable characteristic of scientific journals has facilitated an environment of market concentration. Acquisition of journals on a capabilities-based approach has seen market concentration increase in favor of a small group of dominant publishers. The digital era of scientific publishing has accelerated concentration. Competition laws have failed to prevent anti-competitive practices. The need for government intervention is debated. The definition of scientific publishing as a public good is evaluated to determine the need for intervention. Policy implications are suggested to increase competitiveness in the short-run and present prestige-maintaining alternatives in the long run. A fundamental change in scientific publishing is required to enable socially efficient and equitable access for wider society's benefit.

Estimating the effects of legalizing drug e-commerce

With the technological development the e-commerce channel began to spread to all sectors of the economy. In 2020 with the introduction of sanitary and epidemiological restrictions because of COVID-19 pandemic, many countries lifted the ban of drug e-commerce. Such changes are interesting from the point of view of health economics, and the opening of this sales channel significantly reduces transaction costs and increases the physical availability of drugs, especially in regions with low population density. The article attempts to evaluate the effects of legalization of online sales of drugs on price level and the degree of market concentration (the concentration of the 5 largest companies is used as a proxy), and also uses new methods to estimate the effects of legalizing e-commerce on drug markets. High rates of industry and drug market concentration can lead to a noticeable decrease in the availability of goods. Legalizing e-commerce can be seen as a way to reduce market concentration by facilitating market entry for small firms. The effects of lifting the ban on remote drug sales are estimated using regression analysis on panel data, cross-country matching, and synthetic control. Empirical estimates provide an overall picture of the effects of legalizing online drug sales. After allowing remote drug sales market concentration decreases, indicating a reduction in information asymmetry and switching costs. This effect is particularly important for countries with a high proportion of pensioners, for whom the switching costs are noticeably higher ceteris paribus. Allowing distance trade, due to reducing information asymmetry, drug pricing also slows down, that is, in addition to increasing physical accessibility, opening this channel also increases economic accessibility.

Implementation of Efficiency Tracking and Evaluation Algorithm for Agricultural Product Circulation Based on Radio Frequency Data Tags and Android Platform

The article believes that the circulation efficiency of agricultural products, especially the efficiency of the circulation system of agricultural products, is the ratio of circulation output to circulation cost in the process of circulation of agricultural products. The circulation efficiency of agricultural products cannot be measured by a single indicator. The article argues that the PCA-DEA combination evaluation model can be constructed by using the market integration degree, market concentration degree, technical efficiency, consumer satisfaction, circulation spread, transaction costs, and using the principal component weight constraint cone to objectively assign DEA values. At the same time, it is necessary to develop a circulation mode of agricultural products led by leading enterprises, promote the intensive processing of agricultural products, and improve the circulation efficiency.

Market structure, trader behaviour and performance of small ruminants marketing in Benin, West Africa

Livestock markets are characterised by imperfections, distortions, and efficiency problems that impact livestock marketing. The purpose of this research was to analyse the sheep and goat marketing system in Benin using the structure-conduct-performance (SCP) approach. Primary data were collected from 215 small ruminant traders selected from 21 markets to calculate the market concentration degree, marketing margin, and efficiency. The four largest traders’ concentration ratio (CR4) and Hirschman Herfindahl Index (HHI) show that small ruminant markets have an effective competition structure. These markets were unconcentrated, and barriers to entry were nonexistent, except for trading capital. Small ruminants sold in markets differed according to the animal’s body condition, ecotype, age, sex, and coat colour. These attributes and periods of sale are the main factors that influence pricing. Transport costs, animal feed and care costs, transport, and market taxes were the main transaction costs faced by the traders. The total transaction costs per sheep and goats were estimated at 742.7 ± 530.7 XOF and 663.2 ± 463.6 XOF respectively (XOF is a common and official currency of the eight member states of the West African Economic and Monetary Union. 1 USD = 612,38 XOF). Average marketing margin was 5,869.2 ± 4,357.7 XOF per sheep and 3,851.2 ± 1,597.8 XOF per goat. The marketing efficiency was 78.8% for sheep and 78.9% for goats. This depended significantly on the type of trader, whereby wholesalers were the least efficient. Efficiency, including transaction costs and marketing margins, did not vary significantly between sheep and goats. To improve the efficiency of small ruminant marketing, attention needs to be given to improving the road infrastructure that serves markets and formulating new marketing policies on taxes.

Stockpiling of Critical Metals as a Risk Management Strategy for Importing Countries

Following the triumph of post-fossil technologies, the global demand for critical raw materials in the form of rare metals will increase dramatically in the coming years. From the perspective of importing countries, dependence on these raw materials poses a host of new risks. In this respect, building up reserves of raw materials can be a sensible policy option for the short term. It can help reduce both supply-side and price-related risks. This is particularly true in cases where markets are characterised by high price volatility and/or the risk of supply disruptions is significant. Moreover, if there is a high degree of market concentration, stockpiling can also serve as a strategic tool for long-term price dampening. At the same time, the institutional design of stockpile management is crucial. In view of the economic risks associated with publicly managed stockpiles, we argue for a policy aimed primarily at promoting stockpiling incentives within the private sector. Central reserves managed by the public sector are only advisable as a basic hedge against the extreme scenario of massive supply interruptions. In any case, a stockpiling strategy should be accompanied by efforts to diversify supply sources in the long run.

Closing the Infrastructure Gap for Decarbonization: The Case for an Integrated Mineral Supply Agreement.

Significant amounts of feedstock metals will be required to build the infrastructure for the green energy transition. It is currently estimated, however, that the world may be facing an "infrastructure gap" that could prevent us from meeting United Nations Sustainable Development Goal targets. Prior investigations have focused on the extractive aspects of the mining industry to meet these targets and on looming bottlenecks and regional challenges in these upstream market segments. Scant attention has been paid to the downstream processing segments of the raw materials value chain, which also has a high degree of market concentration. Growing international tensions and geopolitical events have resulted in a shift toward "reshoring" and "near-shoring" of mining processing capabilities as regional powers attempt to make metal supply chains more secure. While increasing resilience, these shifts can also dilute the overall effectiveness of the global mining supply network and subsequently hamper the world's ability to close the green energy infrastructure gap. We argue that broadening the remit of the International Renewable Energy Agency (IRENA) to include coordinating these mission-critical metal processing functions can mitigate these issues. The G20 is one potential forum for enabling an integrated mineral processing agreement under the auspices of IRENA.

Idiosyncratic shocks and aggregate fluctuations in an emerging market

This paper provides the first assessment of the contribution of idiosyncratic shocks to aggregate fluctuations in an emerging market using confidential data on the universe of Chilean firms. We find that idiosyncratic shocks account for more than 40 percent of the volatility of aggregate sales. Although quite large, this contribution is smaller than documented in previous studies based on advanced economies, despite a higher degree of market concentration in Chile. We show that this finding is explained by larger firms being less volatile and by weaker propagation effects across Chilean firms.

Tax incidence in oligopolistic markets

This paper discusses how incidences of unit taxes and ad valorem taxes are related to various market characteristics under imperfect competition. Incidence is higher the more competitive markets are. More specifically, it is higher the wider the firms’ product ranges, the lower the degree of market concentration and the lower the degree of product differentiation, and higher in Bertrand markets compared to Cournot markets. Furthermore, the incidence is higher for unit taxes than for ad valorem taxes. The relative difference between unit and ad valorem tax incidence is larger the lower marginal costs and taxes are.

Market power or efficiency? An empirical study on the Indonesian fertilizer industry

This article aims to analyze the Indonesian fertilizer industry's market structure, efficiency, and performance determinants. This study applies the Structure-Conduct-Performance (SCP) framework proposed by the Harvard (market power) and UCLA-Chicago School (efficiency structure) schools of thought. We run Data Envelopment Analysis (DEA) and panel data regression to analyze the panel data constructed from annual reports of fertilizer producers in 2008 – 2017 and statistical publications from the agriculture ministry. DEA is a nonparametric method that measures technical and scale efficiencies. Meanwhile, panel data regression estimates the determinants of firm performance (ROA). The results show that the fertilizer industry has market power based on three characteristics; the number of incumbents (five), degree of market concentration (95.48 percent), and barrier to entry condition. Meanwhile, its industrial technical efficiency score is low (0.584), but its scale efficiency score is high (0.950). The results also show that firm performance is determined by efficiency, not market power. Both technical and scale efficiency positively and significantly affect performance. On the other hand, market power does not significantly affect performance. This finding supports the UCLA-Chicago School that efficiency is the main factor of firm performance.

FUZZY-LOGICAL EXPERT SYSTEM FOR ASSESSING THE FINANCIAL SECURITY OF ENTERPRISES

The purpose of this study is to build a fuzzy expert system for assessing the financial component of the economic security of telecommunications enterprises. The methodological basis of the research is founded on scientific works of domestic and foreign scientists and leading experts in the field of financial analysis and modeling of economic processes, as well as statistical and financial reporting data that are publicly available. To construct an integral indicator of the financial security of an enterprise, a fuzzy conclusion is used. Three financial indicators are used as input variables. The first indicator X1 is the Current Ratio (CR). The second indicator X2 is Equity Ratio (ER). The third indicator is Return on Assets (ROA). The output variable is defined as an indicator of the financial security of an enterprise Y123 (FS). Both the input variables and the output variable are converted to fuzziness by constructing membership functions. The type and parameters of the affiliation function are justified, and the bell-shaped affiliation function is chosen to describe the uncertainty of values that fall under the normal distribution. The quantity of fuzzy sets at every input is considered as z=3 and the quantity of input variables is considered as ω=3. To achieve completeness of the model, the quantity of logic rules is considered as r=33=9. To calculate a degree of market concentration, Mamdani fuzzy conclusion is applied. Defuzzification is engaged to calculate the value of the output variable Y123(FS) for an indicator that determines the degree of financial security of an enterprise and, as a result, the degree of its economic security. To assess the level of the financial security indicator of an enterprise, a fuzzy expert system is constructed. The fuzzy expert system allows you to use various indicators thanks to the fuzzy logic methodology, which takes into account the fuzziness of input variables and output variables as much as possible. For the three telecommunications companies whose core business is wireline communication, ratios are calculated based on financial reports. Financial coefficients are used to determine the integral indicator of financial security of enterprises. This indicator can be characterized by both numerical values and linguistic terms.

The impact of supply structure on solar home system installations in rural off-grid areas

Markets have an important role in the emergence and diffusion of renewable energy technologies. This paper investigates the impact of market concentration on solar home system installations in rural off-grid energy markets of Bangladesh. We use an extensive dataset that includes 4.11 million solar home systems installed in 503 markets over 15 years (2003–2017). We show that an increase in the degree of market concentration reduces both the number and the total capacity of installed solar home systems after controlling for relevant demand- and supply-side factors. The marginal effect is non-linear and is particularly strong at a higher degree of market concentration. Additionally, we find heterogeneous effects of market concentration depending on the size of the installed solar home system and customer group. Our study implies that policymakers and development authorities should take the supply structure of rural off-grid energy markets into account when designing universal electrification policies.

Exploring the Main Effect of e-Banking on the Banking Industry Concentration Degree on Predicting the Future of the Banking Industry: A Case Study

Today, regarding the rapid growth of Information and Communications Technology (ICT), e-commerce, and the subsequent expansion of electronic banking, the banking market structure is also expected to dramatically be changed. This paper aims to explore the main effect of electronic banking on the structure of the Iranian banking industry by investigating the banking market concentration degree. To accomplish this aim, an intelligent hybrid model is developed based on multilayer perceptron neural network and fuzzy regression of the effects of banking on the relative electronic share of banks. In the developed method, the neural network parameters such as weights and errors have been considered as the fuzzy parameters to model it under uncertainty. Ultimately, the descriptive statistics are utilized to evaluate how the difference in relative size of banks concerning e-banking has changed, in addition to exploring the main effect of e-banking on the bank’s contribution described as a neural network-fuzzy regression model. Moreover, it shows how the concentration degree in the Iranian banking sector has been reduced. The implemented analysis of the reasons for this decrease reveals that the share of banks has decreased due to an increase in the share of the small banks. Furthermore, model estimation confirms that there exists a positive relationship between banks’ share and the use of electronic banking. Besides, the small banks have strongly been shown to utilize the e-banking so that it would lead to an increase in their share and a decrease in the concentration degree. As such, it can be concluded that e-banking has reduced the concentration degree in Iran. The descriptive statistics are employed to prove it.

Financial conditions, local competition, and local market leaders: The case of real estate developers

AbstractThis paper studies whether (and how) corporate decisions are affected by internal factors (e.g., the financial conditions of own company) and external factors (e.g., the actions of local competitors) in an imperfectly competitive environment. We study the listed real estate developers in Beijing as a case study. Our hand‐collected dataset includes transaction‐level information booked indicators (e.g., profitability, liability, and liquidity) and unbooked financial indicators (political connections). Our multi‐step empirical model shows that both the firm's financial conditions and its competitors' counterparts are essential but play different roles in the output design, pricing, and the time‐on‐the‐market (TOM). Internal versus external factors' relative importance relates nonlinearly to the degrees of market concentration. Market leaders' existence alters the small firms' strategy and leads to higher selling prices and slower selling pace in the local market. Our comprehensive financial indicators (booked and unbooked) better predict corporate behaviors than traditional measures.

Market concentration, supply, quality and prices paid by local authorities in the English care home market.

We investigate the impact of exogenous local conditions which favor high market concentration on supply, price and quality in local markets for care homes for older people in England. We extend the existing literature in: (i) considering supply capacity as a market outcome alongside price and quality; (ii) taking account of the chain structure of care home supply and differences between the nursing home and residential care home sectors; (iii) using an econometric approach based on reduced form relationships that treats market concentration as a jointly determined outcome of a complex market. We find that areas susceptible to a high degree of market concentration tend to have greatly restricted supply of care home places and (to a lesser extent) a higher average public cost, than areas susceptible to low degree of market concentration. There is no significant evidence that conditions favoring high market concentration affect average care home quality.

Financial Conditions, Local Competition, and Local Market Leaders: The Case of Real Estate Developers

This paper studies whether (and how) corporate decisions are affected by internal factors (such as the financial conditions of own company) and external factors (such as the actions of local competitors) in an imperfectly competitive environment. We study the listed real estate developers in Beijing as a case study. Our hand-collected dataset includes transaction-level information booked indicators (such as profitability, liability, and liquidity) and un-booked financial indicators (political connections). Our multi-step empirical model shows that both the firm's financial conditions and her competitors' counterparts are essential but play different roles in the output design, pricing, and the time-on-the-market (TOM). Internal versus external factors' relative importance relates to the degrees of market concentration in a nonlinear manner. Local market leaders' existence alters the small firms' strategy and leads to higher selling prices and slower selling pace in the local market. Our findings survive various robust checks.

FUZZY-LOGICAL APPROACH TO CONSTRUCTING AN INTEGRAL INDICATOR IN A LEVEL ESTIMATION MODEL SIGNIFICANT MARKET ADVANTAGE

The purpose of this research is to construct fuzzy expert system to estimate an integral degree of market concentration by fuzzy-logical approach. The methodological basis of the study consists of scientific works of domestic and foreign scientists and leading specialists, statistical and analytical materials of state authorities. Fuzzy Inference is introduced for the integrated indicator construction. Two indicators are chosen as input variables. The first indicator, CR, is a level of concentration ratio. The second indicator, HHI, is the Herfindahl-Hirschman index. Output variable, MC indicator, means a degree of market concentration. Both input and output variables are transformed to fuzziness through the construction of membership function. The function type and parameters are substantiated and “bell”-shaped membership function to describe uncertainty of the values falling under normal distribution is chosen. The quantity of fuzzy sets at every input is considered z=3 and the quantity of input variables is considered ω=2. To achieve completeness of the model, the quantity of logic rules is considered r=3²=9. To calculate a degree of market concentration, Mamdani fuzzy conclusion is applied. Defuzzification is engaged to calculate value of the output variable which is MC indicator to mean a degree of market concentration and therefore readiness to implement the innovation strategy for enterprises active in innovation. To estimate a degree of market concentration, the fuzzy expert system given allows for engagement of different indicators due to fuzzy logic methodology which considers fuzziness of the input and output variables. The construction of an integral indicator for assessing the state of economic competition in order to establish the feasibility of identifying operators and providers with a significant market advantage will improve the assessment of the state of economic competition in the market in the telecommunications services market in Ukraine.

The Development Trend of Environmental Protection Industry Stimulated by Financial policy

The development of environmental protection industry (EPI) has connection with many factors, such as policy, market and economic factors. Different factors have complex mutual influence, and the sensitivity of EPI to policy is higher than other industries, so its development has its own characteristics. This paper adopted the method of system dynamics (SD) to analyze the promoting effect of Financial policy on the development of EPI regarding the environmental protection market (EPM) as the carrier of EPI, and taking the Supply and the market concentration degree (MCD) as the characterization object. The research conclusion shows that Financial policy has an obvious effect on both Supply and MCD, among which the effect on Supply shows a constant scale effect, while the effect on MCD shows a decreasing scale effect.