When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market

28 Pages Posted: 27 Sep 2006

See all articles by Frank Asche

Frank Asche

Stavanger University College

Frode Steen

Norwegian School of Economics (NHH) - Department of Economics

Date Written: August 2006

Abstract

In this paper we apply the Bresnahan-Lau (1982) model to test for market power in the European distribution of salmon. In this particular setting, the model also incorporates a test of whether dumping takes place over time. Utilising data at the import level, derived demand equations are specified rather then consumer demand. 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 test whether the agreement resulted in an increase in the Norwegian market power. The results suggest that Norway did not have market power prior to the salmon agreement, and we find no indication that dumping was taking place. However, the agreement led to Norwegian market power after 1997. 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.

Keywords: Anti-dumping, market power, salmon markets

JEL Classification: C22, C32, L13

Suggested Citation

Asche, Frank and Steen, Frode, When Anti-Dumping Measures Lead to Increased Market Power: A Case Study of the European Salmon Market (August 2006). CEPR Discussion Paper No. 5781. Available at SSRN: https://ssrn.com/abstract=933125

Frank Asche (Contact Author)

Stavanger University College ( email )

PO Box 2557
Ullandhaug
4004 Stavanger
Norway

Frode Steen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 55 959 259 (Phone)
+47 55 959 543 (Fax)

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