Author:
Ma Ling,Nuetah Alexander,Wang Xiuqing
Abstract
Purpose
The purpose of this paper is to investigate the role of market power and returns to scale in the determination of farm-value share.
Design/methodology/approach
This paper utilizes the equilibrium displacement model to investigate the role of market power and returns to scale in the determination of farm-value share. Contrary to the current literature, the paper incorporates oligopoly power, oligopsony power and non-constant return to scale into one generalized model, which systematically enables us investigate the impacts of market power on the determination and changes of farm-value share.
Findings
The results imply that market power as well as non-constant returns to scale is central to the understanding of farm-value share. These, in turn, indicate that ignoring the impacts of market power and degree of return to scale may overestimate or underestimate the impacts of exogenous shocks on changes in farm-value share.
Originality/value
Thus, to the best of the authors’ knowledge, no literature has examined the co-existence of oligopsony power, oligopoly power as well as non-constant return to scale in farm-value share determination. This paper therefore tries to fill this gap.
Subject
Economics and Econometrics,Agricultural and Biological Sciences (miscellaneous)
Cited by
4 articles.
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