The potential impacts of state trading enterprises on world markets: The exporting country case

Export state trading enterprises (STEs) play an important role in global agricultural trade. STE behavior has significant implications for world food markets, irrespective of whether or not these markets are inherently competitive. Previous literature has suggested that STEs have market power and can earn oligopolistic rents. We find there is no compelling empirical evidence to support this argument. However, we show the cross-commodity effects of export STEs can disrupt competitive world markets, through offering an implicit export subsidy to a downstream industry.