Deepening Integration in the Food Industry - Prices, Productivity and Export
(2009) In Lund Economic Studies 159.- Abstract
- This thesis consists of three papers, all of which deal with the effects of deepening European integration on the food and beverage industry and market. The focus is on the period after Swedish EU membership in 1995. The last two papers use firm data and focus on the Swedish food and beverage industry, an industry which is an interesting case study as it was considered to be protected from foreign competition prior to EU membership.
The first paper uses the prices of individual items for EU cities in order to study the impact of the process of integration on the EU food and beverage market. When controlling for distance, language barriers and retail costs, it is shown that a significant border effect has remained in the... (More) - This thesis consists of three papers, all of which deal with the effects of deepening European integration on the food and beverage industry and market. The focus is on the period after Swedish EU membership in 1995. The last two papers use firm data and focus on the Swedish food and beverage industry, an industry which is an interesting case study as it was considered to be protected from foreign competition prior to EU membership.
The first paper uses the prices of individual items for EU cities in order to study the impact of the process of integration on the EU food and beverage market. When controlling for distance, language barriers and retail costs, it is shown that a significant border effect has remained in the EU market for food and beverages since 1995. However, the results reveal that the enlargement in 1995 has meant that the new member countries have become rapidly integrated with other EU countries. In addition, price differences may be ascribed, albeit to a lesser extent, to transport distances, as compared to the early 1990s, suggesting that the Single Market Programme has contributed to reducing transport costs.
The second paper investigates the impact of EU membership on the productivity of the Swedish food and beverage industry. When trade is liberalized, productivity within an industry is expected to increase for two reasons; firms have larger incentives to reduce slack in management as they face a tougher import competition, and market shares are allocated to the most productive firms that are likely to prosper in the international market. The results find no evidence of an overall productivity growth although productivity increased in sub-industries that already had experience of selling abroad. A conclusion is that firms in the sub-industries that were protected from international competition are hampered by an overcapacity in the more competitive environment.
The third paper examines how the export decision among firms in the Swedish food and beverage industry has changed with EU membership. When Sweden became an EU member, tariffs were abolished between Sweden and the other EU countries. Besides, Swedish food regulations had already been harmonised with EC law one year prior to EU membership. The results show that sunk costs for exporting, i.e., irreversible costs for exporting, have become less important since the implementation of the EC food regulations but that they have not been reduced after the year of membership, 1995. The results therefore suggest that the EU has been less successful in reducing trade barriers in the EU food market since the mid-1990s. (Less) - Abstract (Swedish)
- Popular Abstract in Swedish
Avhandlingen innehåller tre empiriska studier som analyserar hur livsmedelsmarknaden påverkas av åtgärder för att fördjupa den europeiska ekonomiska integrationen. Fokus är på det svenska EU-medlemskap och det kontinuerliga arbetet med att harmonisera livsmedelslagstiftningen. Det senare har stor relevans för livsmedelsmarknaden eftersom det har funnits och fortfarande till viss del finns betydande handelsstörande nationella regleringar på livsmedelsområdet. För Sveriges del var en fördjupning av det ekonomiska samarbetet uppenbart i samband med det svenska EU-medlemskapet 1995 då både betydande tariffära och icke-tariffära handelshinder under en kort tid togs bort gentemot övriga EU-länder.... (More) - Popular Abstract in Swedish
Avhandlingen innehåller tre empiriska studier som analyserar hur livsmedelsmarknaden påverkas av åtgärder för att fördjupa den europeiska ekonomiska integrationen. Fokus är på det svenska EU-medlemskap och det kontinuerliga arbetet med att harmonisera livsmedelslagstiftningen. Det senare har stor relevans för livsmedelsmarknaden eftersom det har funnits och fortfarande till viss del finns betydande handelsstörande nationella regleringar på livsmedelsområdet. För Sveriges del var en fördjupning av det ekonomiska samarbetet uppenbart i samband med det svenska EU-medlemskapet 1995 då både betydande tariffära och icke-tariffära handelshinder under en kort tid togs bort gentemot övriga EU-länder.
Det andra kapitlet undersöker hur integrerad den europeiska livsmedelsmarknaden är. I studien används detaljerad pris-data för att undersöka vad det är som gör att livsmedelspriser skiljer sig åt inom och mellan länder. Efter att ha kontrollerat för det geografiska avståndet, språkskillnader, skilda valutor, när länder blev gick med i EU och servicekostnader visar resultaten att landsgränserna fortfarande under tidigt 2000-tal ger upphov till prisskillnader. Avståndet mellan länder bidrar däremot mindre till prisskillnader under den senare delen av perioden, vilket kan tolkas som att EU-marknaden har blivit mindre segmenterad till följd av att transportsektorn har liberaliserats. Resultaten ger också ett tydligt stöd för att EU-medlemskapet har påskyndat den ekonomiska integrationen eftersom prisskillnaderna alltmer har minskat mellan senare och äldre medlemsländer.
Följande kapitel undersöker hur produktiviteten i den svenska livsmedelsindustrin har förändrats med EU-medlemskapet. Stora delar av livsmedelsindustrin ansågs vara skyddade av utländsk konkurrens samtidigt som exportmöjligheterna var väldigt begränsade till följd av höga tariffära och icke-tariffära barriärer. Tidigare studier visar att produktiviteten ökar vid en handelsliberalisering som en konsekvens av att en ökad konkurrens slår ut produktion i mindre produktiva företag samtidigt som exportmöjligheterna gör att mer produktiva företag expanderar sin verksamhet. Dessutom finns det ökade incitament att öka produktiviteten för att kunna konkurrera. Våra resultat styrker dock inte att produktiviteten i livsmedelsindustrin har ökat sedan EU-medlemskapet eftersom produktiviteten mot förmodan har minskat i de industrier som tidigare var mest skyddade. En rimlig tolkning är att dessa industrier har fått för mycket kapital i förhållande till avsättningsmöjligheterna – en överkapacitet som sannolikt har renderat i försämrad produktivitet.
Den fjärde studien analyserar svenska företags möjlighet att börja exportera åren efter och före EU-medlemskapet. Om EU-medlemskapet som förväntat har inneburit att det är mindre kostsamt och mer lönsamt att exportera är företag inte lika bundna vid tidigare exportbeslut. Resultaten visar att det har blivit mindre betydelsefullt att ha exporterat för att börja exportera åren från och med 1994 – året då svenska livsmedelsregleringar hade harmoniserats med EU. Därefter är exporterfarenheten ungefär lika betydelsefull för att exportera. Resultaten stöder därför att en icke-harmoniserad livsmedelslagstiftning skapar signifikanta icke-tariffära handelsbarriärer som hindrar företag att engagera sig i exportverksamhet och att en fortsatt harmonisering därför är betydelsefull för att ytterligare stimulera livsmedelsexporten. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/1516947
- author
- Jörgensen, Christian LU
- supervisor
- opponent
-
- Professor Sjöholm, Fredrik, Institutet för Näringslivsforskning
- organization
- publishing date
- 2009
- type
- Thesis
- publication status
- published
- subject
- keywords
- panel data, prices, industry, economic integration, food, productivity, export
- in
- Lund Economic Studies
- volume
- 159
- pages
- 107 pages
- defense location
- EC3:211
- defense date
- 2010-01-22 10:15:00
- ISSN
- 0460-0029
- language
- English
- LU publication?
- yes
- id
- b0687153-33f9-4a35-86c0-4c79064203f5 (old id 1516947)
- date added to LUP
- 2016-04-04 09:24:28
- date last changed
- 2019-05-21 16:37:09
@phdthesis{b0687153-33f9-4a35-86c0-4c79064203f5,
abstract = {{This thesis consists of three papers, all of which deal with the effects of deepening European integration on the food and beverage industry and market. The focus is on the period after Swedish EU membership in 1995. The last two papers use firm data and focus on the Swedish food and beverage industry, an industry which is an interesting case study as it was considered to be protected from foreign competition prior to EU membership. <br/><br>
<br/><br>
The first paper uses the prices of individual items for EU cities in order to study the impact of the process of integration on the EU food and beverage market. When controlling for distance, language barriers and retail costs, it is shown that a significant border effect has remained in the EU market for food and beverages since 1995. However, the results reveal that the enlargement in 1995 has meant that the new member countries have become rapidly integrated with other EU countries. In addition, price differences may be ascribed, albeit to a lesser extent, to transport distances, as compared to the early 1990s, suggesting that the Single Market Programme has contributed to reducing transport costs. <br/><br>
<br/><br>
The second paper investigates the impact of EU membership on the productivity of the Swedish food and beverage industry. When trade is liberalized, productivity within an industry is expected to increase for two reasons; firms have larger incentives to reduce slack in management as they face a tougher import competition, and market shares are allocated to the most productive firms that are likely to prosper in the international market. The results find no evidence of an overall productivity growth although productivity increased in sub-industries that already had experience of selling abroad. A conclusion is that firms in the sub-industries that were protected from international competition are hampered by an overcapacity in the more competitive environment.<br/><br>
<br/><br>
The third paper examines how the export decision among firms in the Swedish food and beverage industry has changed with EU membership. When Sweden became an EU member, tariffs were abolished between Sweden and the other EU countries. Besides, Swedish food regulations had already been harmonised with EC law one year prior to EU membership. The results show that sunk costs for exporting, i.e., irreversible costs for exporting, have become less important since the implementation of the EC food regulations but that they have not been reduced after the year of membership, 1995. The results therefore suggest that the EU has been less successful in reducing trade barriers in the EU food market since the mid-1990s.}},
author = {{Jörgensen, Christian}},
issn = {{0460-0029}},
keywords = {{panel data; prices; industry; economic integration; food; productivity; export}},
language = {{eng}},
school = {{Lund University}},
series = {{Lund Economic Studies}},
title = {{Deepening Integration in the Food Industry - Prices, Productivity and Export}},
volume = {{159}},
year = {{2009}},
}