| Abstract |
Support for the cooperative yardstick hypothesis was found using a
standard structure-performance model that was extended to include a cooperative
market share variable and was estimated with a large cross-section of food
manufacturing markets. Market concentration and advertising intensity were
positively related to price-cost margins. In addition, the aggregate market
share of the one hundred largest agricultural marketing cooperatives was
inversely related to price-cost margins. The magnitude of the effect was
largest in the more concentrated markets. This suggests that, where cooperatives
have vertically extended themselves into food processing, more competitive
outcomes are found even in highly concentrated markets. |
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