PAPER BRAZILIAN FIRMS MARKET POWER IN THE WORLDWIDE MARKET

Mendes, Giovanna Miranda; Pereira, Vanessa da Fonseca; Braga, Marcelo José

doi:10.1590/0100-67622016000400003

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Articles • Rev. Árvore 40 (4) • Jul-Aug 2016 • https://doi.org/10.1590/0100-67622016000400003 copy

PAPER BRAZILIAN FIRMS MARKET POWER IN THE WORLDWIDE MARKET

PODER DE MERCADO DAS EMPRESAS BRASILEIRAS DE PAPEL NO MERCADO MUNDIAL

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

The objective of this study was to analyze the behavior of Brazilian paper companies in the international market. The analysis was based on the New Empirical Industrial Organization, based on Bresnahan's model (1982)BRESNAHAN, T.F. The oligopoly solution concept is identified. Economics Letters, v.10, p.87-92, 1982. to measure the conduct parameter in the industry. Two-Stage Least Squares (2SLS) method was used for the simultaneous equations estimative. From the results, it cannot be stated that the Brazilian companies behave as a monopolist or as a company in perfect competition in the international market. The parameter of 0.22 in the industry conduct indicated that the market is an oligopoly, intermediary to both extreme behaviors.

Keywords:
Market structure; Paper; Simultaneous equations

Table 1 Estimates of equations of demand and supply of Brazilian cellulose and paper exports.

Demand		Supply
Explaining varibables^a a The number of the first observations (106) was reduced to 86 because the software disregarded missing observations.	Log (Quantity)	Explaining variables	Log (price)
Log (Price)	-2.1445^* * significant at 10%.	Constant	-4.5765^* * significant at 10%.
	(1.1952)		(0.9874)
Income	0.0000^* ***** significant at 1%;	Log (Quantity)	0.1003^* ***** significant at 1%;
	(0.0000)		(0.0584)
Export_usa	0.0000^* ***** significant at 1%;	Salary	0.1171^* ***** significant at 1%;
	(0.0000)		(0.1931)
Trend	-0.1984^* ***** significant at 1%;	P_cellulose	0.0026^* ***** significant at 1%;
	(0.3541)		(0.0006)
R²	80.37	R²	75.21
Sargan (p-value)	0.8663	Sargan (p-value)	0.6998

Table 2 Hypotheses tests lambda resulting from the Bootstrap procedure.

Hypothesis	Statistics of test	Result
H₀: λ = 0; H₁: λ > 0Perfect competition	31.82	H₀ is rejected at 1% of significance
H₀: λ = 1; H₁: λ < 1Monopoly	-150.00	H₀ is rejected at 1% of significance
H₀: λ = 0,5; H₁: λ =/ 0,5Cournot-Nash Behavior	-58.85	H₀ is rejected at 1% of significance

Sociedade de Investigações Florestais Universidade Federal de Viçosa, CEP: 36570-900 - Viçosa - Minas Gerais - Brazil, Tel: (55 31) 3612-3959 - Viçosa - MG - Brazil
E-mail: rarvore@sif.org.br

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