The objective of this study is to provide an empirical analysis of potential market power of the Ukrainian milk processing industry in the market for raw milk. The article is based on the New Empirical Industrial Organization (NEIO) approach and pays special attention to the production technology of the sector. In NEIO studies of market power in the food processing industry the production technology is typically assumed to be of a neoclassical type with simple properties like, e.g., constant returns to scale. Properties of this kind, however, are likely not to prevail in most transition countries of Eastern Europe because of serious distortions in factor usage mainly due to institutional deficiencies. Therefore, the analysis of this study is based on the... |