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Does Vertical Integration Effect Market Power? Evidence fromU.S. Food Manufacturing Industries

Published online by Cambridge University Press:  28 April 2005

Sanjib Bhuyan
Sanjib Bhuyan*
Affiliation:
Department of Agricultural, Food & Resource Economics, Rutgers University, New Brunswick, NJ
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Abstract

The issue of whether vertical integration can raise market power is hotlydebated because firms have a market power-related incentive to integratevertically. Using a sample of U.S. food manufacturing industries, this“market power” motive is empirically tested in this study. Empiricalanalysis shows that forward vertical ownership integration (or verticalmergers) did not increase food manufacturers' market power in the finalproduct market. The study, however, shows that both market structure andconduct significantly influenced market power in the food industries.

Keywords

food industriesmarket powervertical integrationvertical mergerL13L22Q13

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Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 37 , Issue 1 , April 2005 , pp. 263 - 276
Copyright
Copyright © Southern Agricultural Economics Association 2005

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