Published Online:December 2024
Product Name:The IUP Journal of Supply Chain Management
Product Type:Article
Product Code:IJSCM031224
Author Name:Ivi Theodoulou
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:43-60
This study examines the degree of market power of UK’s dairy processors. Using an updated dataset of 96 quarterly observations from 1996 to 2019, it estimates a statistically significant oligopsonistic and oligopolistic degree of UK’s dairy processors; by calculating the well-known and using DOLS and FMOLS methods. Furthermore, the study utilizes a newly compiled dataset (2000-2023) of 284 observations to reveal a 0.30% increase (decrease) in wholesale price after a 1% increase (decrease) in input price. A significant degree of market power and incomplete cost pass-through can indicate imperfections in the market and assist in highlighting the parts of the value chain susceptible to state intervention. Taking into account the Covid-19 pandemic and Brexit periods still provides the same statistical evidence for incomplete cost pass-through along the value chain.
Market power has attracted considerable research attention due to the effects it can have on the prices and quantities available to the consumers and the consequent economic and social welfare implications. Notable studies on market power include Lloyd et al. (2006), Perloff et al. (2007) and Perekhozhuk et al. (2015). Uzunidis (2016) maintains that market...