INSTITUTIONS AND PRICE TRANSMISSION IN THE VIETNAMESE HOG MARKET

The Vietnamese Hog Market

Table 7. Estimations of the
Error Correction Structural
Model (3) (dependent variable:
^DPr,t)

Notes: * 5 significant at 5%, ** significant at 1%.

f 5 variable addition test for the residuals of the marginal
model (4) (test of weak exogeneity of P_p with respect to the
short-run parameters).

Discussion

In the North, the diversity of supply regions to the slaughterers enhances
competition. But competition is limited by the rigidity of the supply contracts
maintained by networks of merchants for the slaughterers to have their specific
investments reimbursed, thereby reducing arbitrage for assemblers. The merchant
networks, using exclusive supply contracts, allow traders to influence the
transmission of price shocks and are therefore explanatory variables for the
asymmetrical price transmission along the marketing channel in the North.

In the South, the collective formal institutions, that is, the People’s Committee
and the wholesale markets they have created, have an indirect effect that
stimulates large-scale competition. The concentration of the selling of the
carcasses in wholesale markets favors the competition among the assemblers of
all the supplying areas and thus among different provinces in the rural supplying

Table 8. Estimations of the

Marginal Model (4) for P_p
(dependent variable: DP_p,t)

Notes: * 5 significant at 5%, ** significant at 1%.

f 5 variable addition test for the residuals of the marginal
model (4) (test of weak exogeneity of P_p with respect to the
long-run parameters).

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