MARKET POWER IN THE WORLD MARKET FOR SOYMEAL EXPORTS

In this article, the degree of imperfect competition in the world market for soymeal exports is estimated using a structural econometric model. The procedure consists of estimating a demand function and the industry first-order profit-maximization condition, from which an estimate of the degree of market power can be retrieved. Using a nonlinear three-stage least squares procedure, the estimate of market power shows that the world market for soymeal exports is perfectly competitive. The empirical results also indicate that this market was competitive even prior to entry by Argentinean firms in the mid-1970s.