Abstract
Iceland and Norway are two main salted fish exporters to Spain. An evident result is that the Icelandic industry benefits from a growing Spanish salted fish market at the cost of the Norwegian industry. The market-oriented innovation of Icelandic industry mainly explains its success against production-oriented Norwegian industry. I argue in this chapter that Icelandic innovation is co-developing with the market power of the Icelandic industry, which makes the Norwegian problem even worse. The chapter tests the existence of Icelandic market power in Spain by using descriptive data analysis and econometric modeling. The sources of Icelandic market power were stated to be friendly Icelandic institutional environments, the industry’s market-oriented innovations, and the control power of the Icelandic salted fish industry in the vertical integrated salted fish value chain.
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Notes
- 1.
Flexibility is defined as \({f_{ii\,}} = \frac{{\partial {P_i}}}{{\partial {Q_i}}}\frac{{{Q_i}}}{{{P_i}}}\) for one’s own quantity effect. It is inverse price elasticity, and thus also called elasticity in some literature (e.g., Goldberg and Knetter 1999).
- 2.
For a detail theoretical discussion, see Goldberg and Knetter (1999).
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Xie, J. (2015). Market Power of the Icelandic Salted Fish Industry in Spanish Markets. In: Lindkvist, K., Trondsen, T. (eds) Nordic-Iberian Cod Value Chains. MARE Publication Series, vol 8. Springer, Cham. https://doi.org/10.1007/978-3-319-16405-2_11
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