State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets |
| |
| Authors: | Fengxia Dong Thomas L Marsh Kyle W Stiegert |
| |
| Institution: | Fengxia Dong is associate scientist, Center for Agricultural and Rural Development (CARD), Iowa State University, Thomas L. Marsh is associate professor, School of Economic Sciences, Fellow IMPACT Center, Washington State University, and Kyle W. Stiegert is associate professor and director of Food System Research Group, Department of Agricultural and Applied Economics, University of Wisconsin–Madison. |
| |
| Abstract: | This study tested if the exclusive procuring and pricing policies of two state trading enterprises (STEs) in international malting barley markets could be used in a strategic trade context. The research provided four key findings. First, the global malting barley market operated in a quantity-setting oligopolistic structure during the study years. Second, both STEs and other exporting countries were in Cournot competition and thus made available strategic trade possibilities. Third, initial commodity payments were too high to generate a rent-shifting outcome. Fourth, product differentiation was confirmed, which may have dampened the desire/ability of STEs to pursue a rent-shifting objective. |
| |
| Keywords: | market structure product differentiation state trading enterprises |
|
|
