Agricultural mechanization and the performance of the local Chinese economy
Baoling Zou, Yudan Chen, Ashok K. Mishra and Stefan Hirsch
Food Policy, Volume 125, May 2024, 102648
Abstract
In this study, we analyze the impact of agricultural mechanization on the local Chinese economy from 2010 to 2020. Findings based on panel data and instrumental variable methods show that agricultural mechanization led to a significant decline in the local gross domestic product. In particular, agricultural mechanization changes the sector’s production and lowers its output value. Agricultural mechanization has reduced the need for labor to such an extent that young Chinese tend to seek jobs in the non-farming sector, leading to a fall in the local agricultural labor supply and household consumption, adversely affecting the development of local industries and service sectors. Mechanization has also led to cash crops being increasingly replaced by grain crops, reducing the total agricultural output. Finally, this paper presents some policy suggestions for agricultural production and rural development.
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Revealed preferences on meat substitute consumption and political attitudes - Testing the left-right and environmental concerns framework
Thies Petersen, Tom-Lukas Denker, Maximilian Koppenberg and Stefan Hirsch
Appetite, Volume 199, 1 August 2024, 107371
Abstract
The promotion of meat substitutes to reduce meat intake is a promising way to reduce the environmental and public health externalities of meat consumption while preserving the important role of taste and texture in meat products. However, the market for meat substitutes is developing more slowly than expected. Therefore, we analyze the factors associated with the heterogeneity in meat substitute consumption in Germany, a country where meat traditionally plays an important role. We use revealed preference data on meat substitute sales from 1025 individual retailers, sociodemographic data, and election results from 92 regions in Germany over the period 2017–2021, to analyze whether differences in meat substitute consumption are associated with consumers' political orientation (liberal/left or conservative/right) and socio-demographic variables. We also investigate whether election results for parties with stronger climate protection goals are associated with meat substitute consumption. Our results show that meat substitute consumption varies significantly across Germany and that this is related to differences in socio-demographic characteristics and voting behavior across regions. Voting for the Green Party and parties with strong climate protection ambitions is positively related to the market share of meat substitutes. In contrast, voting for Germany's most conservative party, which has the lowest ambitions in terms of climate protection targets, is associated with lower meat substitute consumption. Therefore, manufacturers could develop tailored marketing strategies that specifically target these voter groups in order to increase the market share of meat substitutes as alternatives to meat products.
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Food aid and violent conflict: A review and Empiricist’s companion
Maximilian Koppenberg, Ashok K. Mishra, Stefan Hirsch
Food Policy, 2023
Abstract
Food aid presents a core component of humanitarian support for people incapable of meeting basic human needs and aims to bolster food security. However, some studies suggest that food aid may cause violent conflicts in recipient countries, which has initiated a controversy regarding the impact of food aid on conflict in the political and scientific debate. We decompose the relationship between food aid and conflict into the channels through which food aid can affect conflict. We address questions of methodological choice and estimation techniques for empirical studies. Our review of the empirical evidence on the effect of food aid on conflict shows that none of the previous studies proposes a compelling identification strategy. While existing research shows promising approaches in terms of econometric methods, i.e., instrumental variables estimation, they have not succeeded in i) using instruments that pass the necessary tests of instrumental variable estimation and ii) identifying the channels through which food aid influences conflict. We argue that future work should contain a rigorous identification strategy with a stricter focus on the impact of food aid on conflict intensity, empirically examine the conceptual channels through which food aid affects conflict, and that there is the need for data at a more disaggregated level to achieve both objectives.
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Comparing meat and meat alternatives: an analysis of nutrient quality in five European countries
Thies Petersen, Stefan Hirsch
Public Health Nutrition, Cambridge University Press: 06 October 2023
Abstract
Objective: To assess and compare the (macro-)nutritional composition of red meat (RM) and poultry meat (PM) products with the emerging category of meat substitutes.
Design: We use information on nutritional values per 100 g to estimate the differences in the nutritional composition between RM, PM, vegan meat substitute (VMS) and non-vegan meat substitute (NVMS) and derive six unique meat product clusters to enhance the comparability.
Setting: Meat markets from five major European countries: France, Germany, UK, Italy and Spain.
Participants/Data: Product innovation data for 19 941 products from Mintel’s Global New Product Database from 2010 to 2020.
Results: Most of the innovations in the sample are RM products (55 %), followed by poultry (30 %), VMS (11 %) and NVMS (5 %). RM products exhibit a significantly higher energy content in kcal/100 g as well as fat, saturated fat, protein and salt all in g/100 g than the meatless alternatives, while the latter contain significantly more carbohydrates and fibre than either poultry or RM. However, results differ to a certain degree when products are grouped into more homogeneous clusters like sausages, cold cuts and burgers. This indicates that general conclusions regarding the health effects of substituting meat with plant-based alternatives should only be drawn in relation to comparable products.
Conclusions: Meat substitutes, both vegan and non-vegan, are rated as ultra-processed foods. However, compared with RM products, they and also poultry products both can provide a diet that contains fewer nutrients-to-limit, like salt and saturated fats.
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Meat and meat substitutes—A hedonic-pricing model for the German market
Thies Petersen, Milan Tatic, Monika Hartmann, Stefan Hirsch
Journal of the Agricultural and Applied Economics Association, August 2023
Abstract
In this study, a hedonic pricing model with a stochastic frontier is applied to a sample of 183,717 observations of product sales of sausages in Germany to determine the valuation of attributes in the market. The average price of sausages is 1.14€/100 g, with meat substitutes valued at 1.53€/100 g and meat sausages at 1.01€/100 g. Our results show that credence attributes can induce a price premium, but that the effect strongly depends on the type of attribute. This may be important for deriving marketing strategies, as uniform measures may not be effective for both markets.
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The impact of China’s new agricultural subsidy policy on grain crop acreage
Pengfei Fan, Ashok K. Mishra, Shuyi Feng, Min Su and Stefan Hirsch
Food Policy, June 2023
Abstract
As China is the world’s largest producer, importer, and consumer of agricultural products, the new agricultural subsidy policy has significant implications for the global agricultural market. We assess the impact of the new agricultural subsidy on the grain crops acreage by applying difference-in-difference estimation to the China Rural Household Panel Survey (CRHPS) data. Results indicate that the new agricultural subsidy increases grain crop acreage. The results remain robust even after controlling for the effects from other policy measures. The study also identified the mechanism behind the subsidy’s effect. Namely, the new program encourages operators to increase their grain crop acreage by renting more land and increasing the share of grain crops grown. Regarding heterogeneity of the results, the subsidy policy has a more positive impact on grain crop growers than on mixed crop growers, it does not affect large farms (>100 Mu) and its influence is greater among operators in the Northern regions of China. Our findings are relevant for understanding the effect of China’s new agricultural subsidy policies and agrarian market reforms.
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Markups, organic agriculture and downstream concentration at the example of European dairy farmers
Maximilian Koppenberg
Agricultural Economics, 2023
Abstract
A competitive environment, highly concentrated processing and retailing sectors as well as increasing decoupling of direct payments from production volumes and the area under cultivation incentivizes farmers to find alternative ways to improve their bargaining position towards downstream companies. This article explores the possibilities of organic agriculture to enhance the bargaining power of farmers along with the role of concentration in downstream industries. Using a dataset with more than 200,000 observations from approximately 40,000 dairy farms, I estimate markups of price over marginal cost in dairy farming as a measure of market power in the EU. The results show that organic farmers achieve a significant markup premium over conventional farmers. With increasing market shares of organic milk in total milk production markups of conventional farmers diminish whereas those of organic farmers are unaffected. Farm-level markups decrease with increasing market shares of medium-sized dairy processors and increase with increasing market shares of large processors. The presence of large multinational retail chains shows an adverse impact on farmers’ markups.
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A meta-regression analysis on the willingness-to-pay for country-of-origin labelling
Ching-Hua Yeh, Stefan Hirsch
Journal of Agricultural Economics, 2023
Abstract
Food quality and food safety issues arouse increasing interest and concern among consumers and policy-makers. Consequently, the importance of country-of-origin labelling (COOL) is increasing in business, policy and research. Numerous studies have reported a wide range of estimates for consumers' willingness-to-pay (WTP) for COOL using stated preference methods and, in particular, discrete choice experiments. We apply meta-regression analyses to synthesise the heterogeneous results of 204 WTP for COOL estimates extracted from 59 studies which used discrete choice experiments and were published between 2009 and 2020. Meta-regression analysis allows an adjusted summary proxy to be derived for the WTP for COOL and the determinants of heterogeneity in reported WTP estimates are also investigated. Our results suggest that there is a significant positive WTP for COOL, and also reveal that the reported WTP estimates are unaffected by publication bias. In addition, they show systematic variation in WTP estimates across the context and methodological characteristics of the studies. More precisely, we find that the region and the product (animal- vs. plant-based) analysed, as well as certain characteristics of the choice design (e.g., the number of attributes used, or the inclusion of an opt-out option) can have a significant impact on the estimated WTP for COOL. Finally, our results reveal significant differences in price premiums between various types of COOL (e.g., domestic vs. foreign). This highlights that results from individual primary studies should not be generalised without further consideration of the underlying study design.
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Firm names and profitability in German food processing
Stefan Hirsch, Murad Khalilov, Tobias Dalhaus, Ashok K Mishra
European Review of Agricultural Economics, 2023
Abstract
We analyse the signalling effect of a strategy known as eponymy whereby owners integrate their name into the company name. Using microdata from German food processors, we find that eponymous companies generate 2.8 per cent-points higher return on assets, which implies additional yearly profits of €253,000 for a median-sized company. The eponymy effect increases with ownership concentration, indicating that the more control an owner holds over the company, the stronger the signalling. Long names ranking low in the alphabetical order mitigate the effect. This study applies a novel approach to investigate the causal effect of firm naming and thus has implications for food processors.
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The value of firm flexibility under extreme positive demand shocks: COVID-19 and toilet paper panic purchases
Maximilian Koppenberg, Ashok K. Mishra, Tobias Dalhaus, Stefan Hirsch
Economics Letters 2022
Abstract
We estimate the relationship between firms’ production flexibility and profitability under extreme positive demand shocks using the European toilet paper manufacturing industry in 2020 as a case study. This industry faced extreme increases in demand due to consumers panic purchasing toilet paper after the outbreak of the COVID-19 pandemic. Our estimates show that flexibility and profitability are positively related. This is even more pronounced in times of an extreme positive demand shock when a ten percent improvement in flexibility is associated with a five percent increase in profitability.
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CSR and firm profitability: Evidence from a meta-regression analysis
Stefan Hirsch, Thies Petersen, Maximilian Koppenberg and Monika Hartmann
Journal of Economic Surveys 2022
Abstract
We analyze the literature on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) by applying meta-regression analysis (MRA) to 7800 results of 512 empirical studies. Our findings reveal a small positive link between CSP and CFP as well as the presence of publication bias that favors statistically significant CSP–CFP regression coefficients. We also evaluate the impact of the underlying research design on the heterogeneity in published effects using Bayesian and frequentist model-averaging (FMA). We consider 42 contextual characteristics and our results show that reported CSP–CFP effects are smaller in cases where a binary index is used to measure CSP or when CSP is used as the dependent variable. In contrast, firms in industrial sectors or operating in China rather than the United States exhibit stronger effects. Finally, the CSP–CFP effect is driven by the choice of the econometric estimator and the inclusion of firm size as control variable.
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The role of agricultural insurance in boostingagricultural output: An aggregate analysis from Chinese provinces
Baoling Zou, Zanjie Ren, Ashok K. Mishra, Stefan Hirsch
Agribusiness: An International Journal 2022
Abstract
Agricultural insurance is a significant driver of agriculturaldevelopment worldwide. In this paper, a fixed‐effects panelapproach and instrumental variable regressions are used toexamine the impact of agricultural insurance on agriculturaloutput in China. The study is based on panel data from 31Chinese provinces over the period 2004 to 2018. Findingsindicate that agricultural insurance led to a significantincrease in aggregate agricultural output across provinces.The results remain robust when potential endogeneity ininsurance uptake is considered. In addition, mechanism testswere performed to identify the channels through whichinsurance influences productivity. These show that agricul-tural insurance contributes to increasing labor productivityand the area of cultivated land per capita and encouragesspecialized planting, all of which promote growth inagricultural production. Finally, agricultural insurance playsa more important role in Eastern China and nonmajor crop‐producing areas [EconLit Citations: Q13, Q18].
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Markups and export behavior: Firm-level evidence from the French food processing industry
Yaghoob Jafari, Maximilian Koppenberg, Stefan Hirsch and Thomas Heckele
American Journal of Agricultural Economcs 2022
Abstract
The relationship between a firm's markups and its export behavior is highly relevant to individual firms' strategic decisions as well as to governments' policies regarding competition. We investigate the impact of markups on firms' decisions to export and resulting export intensity in the French food processing industry. Moreover, we assess the effect of entry into and remaining in the export market on firms' markups and evaluate differences in markups between exporters and non-exporters. Our results suggest that higher markups lead to both increased participation in the export market and greater export intensity. In addition, we find that firms obtain higher markups by entering and remaining in the export market. Finally, our results suggest that exporters generate higher markups, on average, than non-exporters. Similar results are found when controlling for differences in firms' productivity. Our findings suggest that trade policies designed to increase firms' participation in export markets, such as limits to border restrictions, may counteract domestic competition policies targeted at price–cost margins.
https://onlinelibrary.wiley.com/doi/full/10.1111/ajae.12292
Output market power and firm characteristics in dairy processing: "Evidence from three EU countries"
Maximilian Koppenberg, Stefan Hirsch
Journal of Agricultural Economics 2021
Abstract:
The dairy processing industry is the largest subsector in the EU food industry and is characterised by high concentration. We investigate the extent of output market power exerted in EU dairy processing, applying an advanced stochastic frontier approach to estimate firm-level markups of price over marginal cost using data for France, Italy and Spain from 2008 to 2017. We further relate markups to firm characteristics to identify what type of dairy processors possess the highest power in the sector. Our findings only reveal small average deviations from perfect competition but we find considerable heterogeneity of markups within and between the three countries. We identify a strong positive relationship between markup and profitability, though we find firm size and markups to be inversely related. This indicates that small firms operating in differentiated niche markets are able to charge higher markups, thereby ensuring their profitability. This result can serve EU dairy processors for future strategic alignment, and is particularly interesting from a policy perspective as large firms are mostly blamed in the exercise of market power in public and policy debates.
https://onlinelibrary.wiley.com/doi/full/10.1111/1477-9552.12460
