Horizontal Price Transmission of the Finnish Meat Sector with Major EU Players
The integration of the Finnish meat market in the EU has important implications for domesticagricultural policy. Our aim is to estimate the characteristics of the Finnish pork and beef markets inrelation to those of Germany and Denmark. Our analysis uses symmetric and asymmetric thresholderror correction models. Both pork and beef prices in Finland are found to have slowly cointegratedwith German prices, but the cointegration relationship of the two counties is only found to besymmetric for pork prices, while it is asymmetric for beef prices. The producer price for pork inFinland is symmetrically cointegrated with the Danish price, but the Finnish and Danish beef pricesshow a random walk. This implies that the price transmission to the Finnish pork producer marketfrom the EU market is smoother and more efficient than for the beef market. However, the speed oftransmission is still slow compared to that between the Danish and German markets.
Year of publication: |
2011-09-01
|
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Authors: | Liu, Xing |
Subject: | cointegration | asymmetric | error correction | thresholds | pork and beef prices | Demand and Price Analysis | Livestock Production/Industries |
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