Fisheries and aquaculture economics

Economies of Scale and Concentration in the Greek and the Norwegian Aquaculture Industry. An empirical Study.

by Konstantinos Vergos

The purpose of this study is to investigate whether there are economies of scale in the Greek and Norwegian fish farming industry, and to examine the structure of the sector

Keywords: Fisheries, industry structure, regulation, Government Expenditures and Health, Market Structure

To investigate economies of scale, we use the
Cobb-Douglas production function, while we examine the structure of... more To investigate economies of scale, we use the
Cobb-Douglas production function, while we examine the structure of the fish-farming by computing the HHI
indicator over different years. We find that the market concentration level is high in Greece in both relative, to
Norway, and in absolute terms. From the other part, Norway, the leader of the fish farming of Atlantic salmon
and Rainbow trout globally, suffers from economies of scale in the examined period. Given the fact that both
Greek and Norwegian production is targeting large markets in Europe (UK, France, Italy) both the findings in
Greece and Norway may be worrying signals, that large M&A activity may lead to decreasing competition
and increasing returns to scale in the industry, as previously happened in the food retail industry. Given the
important contribution of fish farming to poverty alleviation, food security and social well being, European
regulators should investigate whether it is optimal to exercise policies that enhance technology transfer and
limit further market concentration.