DYNAMICS OF COMPETITION IN THE HUNGARIAN POULTRY INDUSTRY

Abstract

This study examines the competitive nature of the Hungarian poultry sector between 2006 and 2016. The poultry population has stagnated over the period investigated, however the farm structure has changed significantly and the population of poultry held by individual farms has decreased. In this research, market competition was measured with the persistence of abnormal profits, while profit persistence was estimated using the Arellano-Bond GMM and Blundell-Bond dynamic panel regression. Based on the results, it can be said that the level of profit in the poultry sector is close to the equilibrium profit level. The farm size, technological development as well as the tax advantages of individual farms distort competition leading to higher profits. Taking long-term risk has a negative impact on abnormal profits. The results of the research suggests that the breakthrough points for the poultry sector are technological progress and population growth, as well as a reduction in labor intensity.