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Market power and rents in global supply chains
Author(s) -
Swinnen Johan F.M.,
Vandeplas Anneleen
Publication year - 2010
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2010.00493.x
Subject(s) - economic rent , market power , enforcement , consolidation (business) , supply chain , economics , competition (biology) , industrial organization , monopsony , emerging markets , market economy , business , microeconomics , macroeconomics , monopoly , marketing , ecology , political science , law , biology , accounting
Market power and competition policy in food supply chains has emerged as an important economic issue in economics, and a highly sensitive item on the policy agenda. Consolidation is taking place in the food industry, both in high‐income countries and in emerging economies, but the impact of concentration in global food chains on efficiency and rent distribution is more nuanced and complex than often claimed. We review the literature and extend it by developing a model which explicitly takes into account market imperfections and contract enforcement problems in supply chains. Increased competition benefits farms by improving contract conditions, but contract enforcement becomes more complicated.