Sy. Deodhar et Im. Sheldon, IS FOREIGN-TRADE (IM)PERFECTLY COMPETITIVE - AN ANALYSIS OF THE GERMAN MARKET FOR BANANA IMPORTS, Journal of agricultural economics, 46(3), 1995, pp. 336-348
Many studies have been carried our that measure welfare effects of the
newly adoped common policy on banana imports by the European Union. A
ll these studies assume that foreign trade in bananas is characterised
by perfectly competitive behaviour. However, if foreign trade in bana
nas is imperfectly competitive, then the welfare predictions about the
common banana policy may turn out to be incorrect. It is necessary, t
herefore, to empirically estimate the degree of market Imperfection in
the banana market. In this paper, we estimate the degree of market im
perfection in the German market for banana imports using a structural
econometric model. Based on the bootstrap procedure, we reject the hyp
othesis that firms in this market behave perfectly competitively, but
cannot reject the hypothesis that firms are engaged in Cournot-Nash be
haviour.