Picture by Sam Beebe on Flickr
Picture by Sam Beebe on Flickr

EfD Chile researcher received award for study on trade associations

Manuel Estay, EfD Chile researcher, University of Concepción, and his colleagues Thomas Eisenberg, University of Delaware, and Debi Prasad Mohapatra, University of Massachusetts - Amherst, were awarded The Robert F. Lanzillotti Prize for Best Paper in the Antitrust Economics category. This took place when The International Industrial Organization Society hosted its 2023 IIOC Conference on April 21-23, at the Capital Hilton in Washington, DC.

The title of their research work is Welfare Effects of Trade Associations: The Case of the Chilean Salmon Export Industry. It was selected by a committee of experts to be presented at the IIOC 2023 Conference. Manuel Estay commented that only one study is selected in this category per year, which means that "the work is of a high standard".

This prize was first awarded in 2008 to honor the late Dean Emeritus of the University of Florida Warrington College of Business, Robert "Bob" Lanzillotti, who passed on July 8, 2022, at the age of 101.

Benefits quality

Their investigation examines the welfare consequences of trade associations in an exporting country, Chile in this case, on consumers in destination countries. The trade associations are a significant way for industries and governments to enforce, for example, product quality standards, share information, minimize supply-chain frictions and coordinate business practices between firms, which may benefit the consumers in the export destination countries.

Has also negative effects

However, it can also raise concerns about collusive behaviors. The existing literature explored by the researchers exposes strong evidence of activities from which trade associations may facilitate the coordination of prices, establish entry-barriers, or undertake other activities that diminish competition, for instance, collusion.

This study provides the first welfare analysis of trade associations by measuring the costs and benefits of associations in the Chilean salmon farming and export industry, especially the trade association SalmonChile (SC).

Results show that trade associations play an important role in determining the welfare of producers and consumers alike: they have a strong positive effect on consumer utility, but require higher marginal costs of production due to more expensive farming and handling processes, which is consistent with mechanisms for higher quality products, reduced operation times, among other factors.

The Robert F. Lanzillotti Prize is for the best paper in antitrust economics accepted for presentation at the International Industrial Organization Conference is awarded annually. The winning paper is selected by a committee of experts from the relevant papers that are accepted for presentation at the conference. You can read the winning article for more information here.

By Belén Pulgar.

News | 9 June 2023