Thomas Kopp, Bernhard Brümmer, Zulkifli Alamsyah and Raja Sharah Fatricia
In Indonesia, rubber is the most valuable export crop produced by small scale agriculture and plays a key role for inclusive economic development. This potential is likely to be…
Abstract
Purpose
In Indonesia, rubber is the most valuable export crop produced by small scale agriculture and plays a key role for inclusive economic development. This potential is likely to be not fully exploited. The observed concentration in the crumb rubber processing industry raises concerns about the distribution of export earnings along the value chain. Asymmetric price transmission (APT) is observed. The paper aims to discuss these issues.
Design/methodology/approach
This study investigates the price transmission between international prices and the factories’ purchasing prices on a daily basis. An auto-regressive asymmetric error correction model is estimated to find evidence for APT. In a subsequent step the rents that are redistributed from factories to farmers are calculated. The study then provides estimations of the size of this redistribution under different scenarios.
Findings
The results suggest that factories do indeed transmit prices asymmetrically, which has substantial welfare implications: around USD3 million are annually redistributed from farmers to factories. If the price transmission was only half as asymmetric as it is observed, the majority of this redistribution was re-diverted.
Originality/value
This study combines the approaches of non-parametric and parametric estimation techniques of estimating APT processes with a welfare perspective to quantify the distributional consequences of this intertemporal marketing margin manipulation. Especially the calculation of different scenarios of alternative price transmissions is a novelty. The data set of prices on such a disaggregated level and high frequency as required by this approach is also unique.
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Thomas Kopp and Bernhard Brümmer
While traders of agricultural products are known to often exercise market power, this power has rarely been quantified for developing countries. The paper aims to discuss this…
Abstract
Purpose
While traders of agricultural products are known to often exercise market power, this power has rarely been quantified for developing countries. The paper aims to discuss this issue.
Design/methodology/approach
In order to derive a measure, the authors estimate the traders’ revenue functions and calculate the marginal value products directly from them. The authors subsequently find the determinants affecting their individual market power.
Findings
Results show that market power at the traders’ level exists and is substantial. This market power is amplified in situations of extreme remoteness, and weakens with increasing market size.
Originality/value
An exceptional data set with detailed information on the business practices of rubber traders in Jambi, Indonesia is employed with an innovative methodology to directly estimate revenue functions.
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Mohammad Mohi Uddin, Bernhard Brümmer and Kurt Johanes Peters
The purpose of this paper is to compare technical efficiency and metatechnology ratios (MTR) in three production systems confronted with different technological and resource…
Abstract
Purpose
The purpose of this paper is to compare technical efficiency and metatechnology ratios (MTR) in three production systems confronted with different technological and resource endowments in Bangladesh to identify the suitable production systems for increasing productivity.
Design/methodology/approach
The primary data collected by authors from 180 dairy farmers were sampled and modeled in a stochastic metafrontier framework due to its ability to estimate and compare the efficiency of firms among various groups with possibly different group-specific technologies and heterogeneous production environments.
Findings
The empirical results show that farms from intensive system were closer to their production frontier than extensive and traditional system. Regarding productivity differences among systems, the MTR is by far highest for intensive, indicating the technological advantage of this system over others two systems. The estimation of farm-specific inefficiency model revealed that farmers’ access to extension and credit services are assumed to be significant determinants in reducing inefficiency.
Practical implications
This study concludes that the ability of the farmers to increase productivity vary depending on the production systems due to variation in resource endowments and access to various inputs and support services. Thus, improving productivity depends on effective policy design on harmonizing access to resources and delivery of extension and credit services.
Originality/value
The empirical analysis of data representing different production endowments by stochastic metafrontier make it possible to identify the efficiency level as well as technology gap, thus, ways to identify the possible policy options reducing those gaps and improving productivity.
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The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and auditing…
Abstract
The Foreign Corrupt Practices Act (FCPA) of 1977 and its amendment – the Trade and Competitive Act of 1988 – are unique not only in the history of the accounting and auditing profession, but also in international law. The Acts raised awareness of the need for efficient and adequate internal control systems to prevent illegal acts such as the bribery of foreign officials, political parties and governments to secure or maintain contracts overseas. Its uniqueness is also due to the fact that the USA is the first country to pioneer such a legislation that impacted foreign trade, international law and codes of ethics. The research traces the history of the FCPA before and after its enactment, the role played by the various branches of the United States Government – Congress, Department of Justice, Securities Exchange commission (SEC), Central Intelligence Agency (CIA) and the Internal Revenue Service (IRS); the contributions made by professional associations such as the American Institute of Certified Public Accountants (AICFA), the Institute of Internal Auditors (IIA), the American Bar Association (ABA); and, finally, the role played by various international organizations such as the United Nations (UN), the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO) and the International Federation of Accountants (IFAC). A cultural, ethical and legalistic background will give a better understanding of the FCPA as wll as the rationale for its controversy.