Market Integration in the EU Pork Market Evidence from Panel ESTAR Models

Mariusz Hamulczuk

Abstract: Market integration is a key pre-condition for the efficient allocation of produc-tion factors and the maximization of economic welfare. Within this framework the aim of this research is to assess horizontal integration of the UE pork markets over time using panel models and weekly price series data. According to the spatial equilibrium model, market agents make trade decisions only when price differences exceed trade costs. Thus panel STAR models were used in this study. The obtained results confirmed nonlinear price adjustment in the EU pork markets. Price adjust-ments in central EU countries are stronger than in the peripheral countries and the
strength of price convergence varies over time.

Keywords: European Union; panel STAR models; pork market; spatial market integration

Date published: 2021-01-04