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When anti-dumping measures lead to increased market power : a case study of the European salmon market

Asche, Frank; Steen, Frode
Working paper
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dp2003-27.pdf (67.18Kb)
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http://hdl.handle.net/11250/162872
Utgivelsesdato
2003-12
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  • Discussion papers (SAM) [587]
Sammendrag
In this paper we apply the Bresnahan-Lau (1982) model to test for market power in the

European distribution of salmon. Utilising data at the import level, derived demand equations

are specified rather then consumer demand. Earlier studies using this approach (Steen and

Salvanes, 1999) found some evidence of market power. From 1997 a so-called salmon

agreement that implied minimum prices, a growth ceiling and a feeding restriction program

for Norwegian farmers was imposed. Here we apply a newer dataset to test whether the

agreement resulted in an increase in the Norwegian market power. The results suggest that

Norway regained market power and even increased it due to this salmon agreement. It is

interesting to note that the agreement was initiated to prevent anti dumping duty of 13% that

Norwegian farmers would have to pay otherwise. The increase in mark-up from imposing the

agreement is found to be in the order of 14-15%, suggesting that the Norwegian farmers saved

a fee of 13% and gained a markup that was even higher. This increase in market power is not

welfare improving to the EU consumers and should therefore be traded off against the benefit of protecting EU salmon producers.
Utgiver
Norwegian School of Economics and Business Administration. Department of Economics
Serie
Discussion paper
2003:27

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