Pricing Behavior for Sustainably Farmed Fish in International Trade: The Case of Norwegian Atlantic Salmon (Salmo salar)

• Published in: Sustainability
• Main Author: Bong-Tae Kim
• Format: Text
• Language: English
• Published: Multidisciplinary Digital Publishing Institute 2018
• Subjects: sustainability; pricing behavior; Atlantic salmon; international trade; pass-through; Norway; Salmo salar
• Online Access: https://doi.org/10.3390/su10124814

The purpose of this study is to examine how the competitive advantage on international markets based on sustainable production is reflected in the pricing behavior of farmed fish, using Norwegian Atlantic salmon (Salmo salar) as an example. The salmon is widely consumed and highly traded due to the rapid development of aquaculture. Norway, which has been successful in regulating and innovating for sustainable aquaculture, accounts for more than half of world production. A model dealing with pass-through of exchange rates and tariff rates based on the exporter’s profit maximization was applied to 28 major countries importing from Norway, using yearly panel data for 2000–2016. Significant evidence of price discrimination was observed in Asian countries where Norway has a high market share, such as China, South Korea, Thailand, and Vietnam. This implies that the market structure of imperfect competition played a major role, suggesting the need to diversify imports to transform the market structure in favor of consumers in Asian countries. Research on the pricing behavior of fisheries products, including cultured fish, is limited in international trade. This paper addresses the gap by applying the pass-through model with changes in tariff rate as well as exchange rate.