Bargaining Power Research Articles

Implications of Competitive Advantage Strategies in the Buying and Selling Used Iron

This study aims to analyze and identify the competitive structure that forms the key success factors (KSFs) in the scrap metal trading industry, with open innovation as a mediating factor and its effect on competitive advantage. The research employs an explanatory method to explore the causal relationships between variables. Data were collected through questionnaires, direct interviews with business owners, managers, employees, and consumers in the scrap metal trading sector, as well as secondary sources such as articles, journals, online databases, libraries, and government agencies like the Ministry of Trade (Deperindag) and the Central Bureau of Statistics (BPS). The data collection techniques include literature review, interviews, and observations. Analytical methods employed in this study include descriptive analysis through company profiling, Porter's Five Forces model for industry competition analysis, and an assessment of open innovation as a mediating factor for competitive advantage. The findings reveal that key success factors contributing to competitive advantage in the scrap metal trading industry are economies of scale, marketing capabilities, access to capital, raw material supply, and technology utilization. The application of Porter's Five Forces, when mediated by open innovation, strengthens the relationship between open innovation and organizational strategy, ultimately leading to sustainable competitive advantage. Competitive advantage is enhanced by increased open innovation, which fosters organizational collaboration, adaptability, and the development of novel strategies. Through the implementation of open innovation, scrap metal trading companies can leverage diverse ideas and resources, enhancing competitiveness in dynamic market environments. Conclusion: The threat of new entrants in the scrap metal trading industry is low, while the bargaining power of suppliers and buyers is strong. The threat from substitute products is weak, and the rivalry among existing competitors is intense. Open innovation contributes to competitive advantage by promoting collaboration, encouraging adaptability, and supporting strategic innovation.

한국의 e커머스 시장 전략방향 연구: Business Model Canvas, 5Force Model을 이용한 공급망 전략 측면

Purpose: This study derives a sustainable strategic direction for K-commerce companies to respond to a threatened entry of multinational companies, mainly Chinese (C-commerce) companies, into the Korean e-commerce market. Research design, data, and methodology: The methodology includes a market approach, the Business Model Canvas, and the 5Force Model for the study period from March to July 2024. Results: The direction of Korea's e-commerce market success strategy, classified into asset type and non-asset type, is that the first is One Strength, which has the competitiveness and entry power to lead existing competitors. The second is that One Medle has the bargaining power of suppliers that can protect existing customers from conversion due to consumer benefits and seller benefits. The third is Three Weakness, which is facing the threat of new entrants, the bargaining power of buyers, and the threat of alternative products, so there are always risks. Conclusions: The implications of the “One Strength, One Medle, and Three Weakness” sector derived from Korea's e-commerce market strategic direction study are summarized into three in terms of supply chain strategy and presented in the text.

디지털 플랫폼 기반 패션기업의 성공 요인 연구 : B2C 공급망 전략 측면

The Business Model Canvas and the 5Force model were used as core methodologies, whereas market approaches such as Internet research were used to supplement the research. As a result of this study, by linking and analyzing BMC and 5Force model as a correlation, three of the five competitive factors of the 5Force model were selected: bargaining power of suppliers, bargaining power of buyers, and threat of new entrants, and all nine essential factors of BMC were included in the bargaining power of suppliers. It was confirmed that four out of the nine factors corresponded to the bargaining power of buyers, whereas five out of the nine factors were closely correlated with each competitive factor for the threat of new entrants.

The impact of customer concentration on the provision of reverse trade credit

PurposeThe purpose of this study is to investigate the impact of customer concentration on the provision of reverse trade credit at the firm level.Design/methodology/approachUtilizing unbalanced panel data of Chinese A-share listed firms from 2007 to 2022 as the study sample, this paper employs a fixed-effects model to investigate the association between customer concentration and firms’ reverse trade credit.FindingsThis study finds that firms with higher customer concentration receive less reverse trade credit. Heterogeneity tests reveal a significant amplification of reverse trade credit in high-tech firms but a detrimental impact in large-sized, competitive and high-analyst-following firms. Further studies conclude that firms’ motivations, including bargaining power, financing and transaction guarantee motivations, collectively influence the extent of reverse trade credit acquisition.Originality/valueTo our knowledge, this paper represents the first attempt to conduct a comprehensive investigation of reverse trade credit, specifically through the lens of customer concentration, utilizing firm-level panel data sourced from a singular country.

Capital flow freezes

AbstractThe period following the 2008 financial crisis focused attention on “twin-crises,” where banking crises precipitate sovereign crises due to increased bank support. We show that when private sector debt is renegotiated centrally, and bargaining power is low, it results in suboptimally low levels of debt and default rates (haircuts). If, instead, the bargaining power is sufficiently high, the supply of debt exceeds its demand and capital inflows “freeze”. These inefficiencies arise because the decentralized borrowers fail to consider how their bond supply impacts debt renegotiation outcomes, affecting both bond prices and the asset span. These issues can be addressed through macroprudential policies in the form of taxing capital inflows.

Do Board‐Level Employee Representatives Increase Pay Equity in Firms?

ABSTRACTQuestion/IssueThis study investigates the role of board‐level employee representatives (BLERs), a common corporate governance practice in Europe, in determining the pay ratio between CEOs and average employees.Research Findings/InsightsUsing 15,340 firm‐year observations from 17 European countries between 2001 and 2019, we find that BLERs provide greater bargaining power to the board for dealing with CEOs and use this power to reduce the pay gap between CEOs and employees. Subsample analyses indicate that bargaining power is more apparent when BLERs are more socially connected, have longer tenure, and hold more seats on the board.Theoretical/Academic ImplicationsThis study supports the role of BLERs in providing workers with more bargaining power to create fairer wage distribution in firms. Furthermore, it supports the fair wage–effort theory, indicating a positive effect of lower pay ratios on firm value following the presence of BLERs.Practitioner/Policy ImplicationsThis study demonstrates the effects of a unique corporate governance practice, the presence of BLERs, on companies' wage distribution, with significant policy implications. In particular, the results indicate that when presented with opportunities in affecting companies decision‐making BLERs provide fairer environments for the workers who they represent.

Do Firms Gain From Managerial Overconfidence? Managerial Bargaining Power and the Role of Severance Pay

ABSTRACTWe analyze the effects of optimism and overconfidence when the manager has bargaining power and the compensation package includes severance pay. Optimism implies that the manager overestimates the probability of success, while overconfidence induces the manager to overestimate the increase in the probability of success due to her investment. If the manager can renegotiate the initial contract, the advantage of using severance pay to induce the manager to invest, commonly found in the literature, is reduced by the presence of the biases. Optimism increases severance pay and managerial entrenchement with a negative effect on expected profit. Overconfidence reduces incentive pay, as shown by the previous literature, but its effect on severance pay depends on the intensity of the bias. A moderate overconfidence reduces severance pay and increases expected profit. Conversely, extreme overconfidence increases severance pay and this may offset the beneficial effect on incentive pay. Thus, the attempt to exploit managerial overconfidence to reduce incentive pay may backfire if the manager is replaced. Our model suggests that the large severance payments documented by the empirical literature represent a form of efficient contracting when the optimistic and overconfident manager has bargaining power.

Pricing strategies in the Silicon Valley housing market: an update on TOM and recent events

Purpose This study aims to explore the relationship between house prices and time-on-market (TOM) in Silicon Valley. Previous findings have been inconclusive due to variations in property characteristics. This paper highlights the discrepancy between listing and selling prices and identifies differences among housing types such as condominiums, detached houses and townhouses based on housing orientations and customer groups. Additionally, this study considers the impact of the COVID-19 pandemic and the Fed’s interest rate policies on the housing market. Design/methodology/approach The authors analyze 63,853 transactions from the Bay East Board of Realtors’ Multiple Listing Service during 2018 to 2022. The study uses a multiple-stage methodology, including a nonlinear hedonic pricing model, search theory and two-stage least squares method to address concerns relating to endogeneity. Findings The Silicon Valley housing market shows resilience, with low-end properties giving buyers more bargaining power without significant price drops. High-end properties, on the other hand, attract more attention over time, leading to aggressive bidding and higher final sale prices. The pandemic, despite reducing housing supply, did not dampen demand, leading to price surges. Post-COVID, price correlations with TOM changed, indicating a more cautious buyer approach toward high premiums. The Fed’s stringent monetary policies post-2022 intensified these effects, with longer listing times leading to greater price disparities due to financial pressures on buyers and shifting dynamics in buyer interest. Practical implications Results reveal a nonlinear positive correlation between TOM and the price formation process, indicating that the longer a listed property is on the market, the greater the price changes. For low-end properties, TOM becomes significantly negative, while for high-end properties, the coefficient becomes significantly positive, with effects and magnitudes varying by type of dwelling. Moreover, external environmental factors, especially those leading to financial strain, can significantly impact the housing market. Originality/value The experience of Silicon Valley is valuable for cities using it as a development model. The demand for talent in the tech industry will stimulate the housing market, especially as the housing supply will not improve in the short term. It is important for government entities to plan for this proactively.

Decarbonizing a supply chain with an unreliable supplier: Implications for profitability and sustainability

The increasing emphasis on corporate social responsibility has led to a growing trend among firms to initiate decarbonization campaigns, aligning their sustainability efforts with profitability objectives. This paper explores the challenge of decarbonizing a supply chain wherein a buyer cooperates with an unreliable supplier that possesses private absorptive capacity and varying degrees of bargaining power. We develop models based on whether the absorptive capacity remains private information and whether the buyer has more bargaining power in determining the profit-maximizing price. Our findings indicate that the buyer may opt to avoid entering into contracts with the supplier for decarbonization if the absorptive capacity ratio falls below certain values. When contracting occurs, decarbonization has the potential to yield a mutually beneficial outcome for firms, customers, and the environment. Nevertheless, the presence of private information has negative implications for customers and the environment because it results in reduced consumer surplus and increased carbon footprint. As the buyer’s bargaining power strengthens, the likelihood of supply chain decarbonization increases, potentially leading to more consumer surplus and less carbon footprint. Finally, we discuss the effects of key model factors from a triple bottom line perspective (i.e., profit, people, and the planet).

Women’s Bargaining Power and Children’s Nutritional Status: Evidence from Indonesia

Child stunting is a serious challenge in Indonesia, one of the largest middle-income countries in the world. Beyond the influence of bio-behavioral determinants, mothers’ bargaining power in the household is expected to have an overarching contribution to stunting, particularly as the primary caregivers of their children. Using a dataset from the fifth wave of the Indonesia Family Life Survey (IFLS-5), this study examines whether and to what extent a mother’s bargaining power influences children’s nutritional status. The study uses the instrumental variables method to correct the potential endogeneity of the mother’s bargaining power. Results suggest that children of mothers with higher intrahousehold bargaining power have a lower prevalence of stunting and better anthropometric outcomes. However, other members of the household matter, in the sense that improved outcomes are evidenced when the mother exercises her choice in decision making in a more consensual manner, by consultation with other household members. HIGHLIGHTS In Indonesia, higher women’s bargaining power enhances child nutritional long-term outcomes. Child nutrition improves when women make decisions jointly with other family members. Boys appear to be the main beneficiaries of mothers’ higher bargaining power. Policies to increase women’s agency need to consider family support and social norms.

Opinion of Women on Possession of Land and Risk Handling Capacity

Abstract: This study shows that and ownership affects women's risk management abilities. This study was conducted in the two upazilas (Sub-districts) namely Delduar, and Nagorpur of Tangail district in Bangladesh. In this study, data were collected during the period of February 2024 to March 2024 from the studies areas. We found a favorable correlation between women's land ownership and risk management. Larger landholding women were more confident and competent in managing financial, environmental, and social hazards. This higher risk handling capability is due to land assets' financial stability, the ability to invest in risk-reducing technology or practices, and community bargaining power. This study shows that property ownership gives women a greater buffer against economic uncertainty and allows them to take proactive risk mitigation strategies. Data also shows that landowner women are more likely to have diverse income sources, minimizing their market susceptibility. They also use support networks and community risk management efforts more. The study concludes that land ownership improves women's risk management. Women acquire economic stability and risk management leverage by obtaining land holdings. This shows that land access regulations might boost women's resilience and risk management. Future study should examine how land ownership affects risk management and how to give disadvantaged women land access.

The challenges of regulatory pluralism

Countries with small and/or less-resourced regulatory authorities that operate outside of a larger medical product regulatory system face a regulatory strategy dilemma. These countries may rely on foreign well-resourced regulators by recognising the regulatory decisions of large systems and following suit (regulatory reliance); alternatively, such countries may extend formal decision recognition to regulators in multiple other jurisdictions with similar oversight and public health goals, following a system which we call regulatory pluralism. In this policy comment, we discuss three potential limitations to regulatory pluralism: (i) regulatory escape, in which manufacturers exploit regulatory variation and choose the lowest regulatory threshold for their product; (ii) increased fragmentation and complexity for countries adopting this approach, which may, in turn, lead to inconsistent processes; and (iii) loss of international bargaining power in developing regulatory policies. We argue that regulatory pluralism has important long-term implications, which may not be readily apparent to policy makers opting for such an approach. We advocate for the long-term value of an alternative approach relying on greater collaboration between regulatory authorities, which may relieve administrative pressures on countries with small or less-resourced regulatory authorities, regardless of whether countries pursue a strategy of domestic regulation or regulatory pluralism.

When should the fresh-food retailer embrace near-expired food commercialization?

Despite the potential of near-expired food commercialization (NFC) to recover value from unsold food, skepticism persists due to concern about its impact on fresh food margins. This study introduces a game-theoretic model to explore the optimal strategy and price-setting timing for the fresh-food retailer considering NFC. We find that the optimal strategy transitions from no NFC to partial and then to full NFC as the order quantity increases. Specifically, under full NFC, the fresh-food retailer with strong bargaining power and high perceived quality benefits from adopting clearance-priority pricing, which prioritizes the pricing of the near-expired food. Conversely, the retailer with limited power and lower perceived quality prefers fresh-priority pricing, which sets the retail price of fresh food first. Under partial NFC, while clearance-priority pricing generally yields profits, the high disposal cost may compel even powerful fresh-food retailers to switch to fresh-priority pricing to mitigate the risks associated with negotiation failures. We further analyze extended models to confirm the robustness of our findings. Our research contributes to the literature and guides practice by addressing common misconceptions about NFC.

Do high‐centrality CEOs influence audit outcomes?

AbstractUsing insights from the social network theory which posits that individuals with high network centrality have influence and power within their social networks, we argue that CEO network centrality increases the CEO bargaining power in audit fee negotiations. We find that audit fees are lower in firms managed by CEOs with high network centrality. We also find that high‐centrality CEOs do not negotiate audit fees at the expense of lower‐quality audit services. We further document the influence high‐centrality CEOs have on the audit decisions of their social peers within the network. For example, we show that less central (i.e., peripheral) CEOs are likely to hire auditors that do work for firms with CEOs enjoying high levels of network centrality. Together our findings suggest that high network centrality reflects a bargaining power CEOs can use to lower their audit fees.

The High Cost of Doing Good: Earnings in Social Assistance Jobs in the United States

Abstract Workers in care occupations and industries in the United States earn less than counterparts with similar personal characteristics in other jobs. We document considerable gradation within care services, showing that workers employed in social assistance earn less than workers in other care industries such as education and healthcare. We posit that social assistance providers are particularly vulnerable to pay penalties because their clients suffer from low bargaining power, weak political voice, and cultural stigmatization. Institutional context matters—social assistance has witnessed a shift from public to private provision since the 1980s; unlike other care industries, private sector workers in social assistance (most of whom work in non-profits) earn less than their counterparts in the public sector. We suggest that public subcontracting to private firms is a cost-cutting strategy that has put downward pressure on the wages of social assistance providers.

Inflation and income distribution in Brazil from a Kaleckian perspective*

This article shows that income inequality and inflation in Brazil are multidimensional phenomena linked to the unemployment rate and to the foreign sector. Consequently, the relationship between inflation and income distribution depends on the source of inflationary pressures, as evident in the 2000 to 2020 period. This reflects significant differences in the dynamics of inflation in the tradable and non-tradable goods sectors and is consistent with the Kaleckian framework. Yet, a missing inequality puzzle is identified, suggesting that changes in the Industry sector’s relation with the foreign sector altered some of the relationships analyzed. The article also investigates the influence of the foreign sector on the intensity of the domestic distributive conflict in Brazil and discusses some implications of an intensified distributive conflict in terms of policies and regulations that alter the bargaining power of workers.

Turmeric Cultivation in Erode District: An Analysis of Farmer Constraints

Turmeric farming is a key agricultural activity in the Erode District of Tamil Nadu, contributing significantly to the region's economy. However, farmers in this area face a myriad of constraints that hinder their productivity and economic stability. This study investigates the specific challenges encountered by turmeric growers, focusing on technical, economic, marketing, storage, and general constraints. In terms of production, consumption, and exports, India leads the world in turmeric usage. India is estimated to produce 11.7 lakh metric tonnes of turmeric in 2022–2023. Telangana, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Madhya Pradesh, and West Bengal are the main states in India that produce turmeric. In Tamil Nadu, 96,000 metric tons of turmeric are grown around 20,000 hectares. An ex-post facto research design was employed, with Kodumudi Block selected due to its prominence in turmeric cultivation in Erode district. A proportionate random sampling technique was used to select 120 respondents from five villages: Vengampur, Punjai Kollanali, Unjalur, Kollathupalayam, and Kodumudi. The inclusion of an interview schedule as the data collection tool adds depth to the study, as it allows for a structured approach to gathering information directly from the respondents, ensuring the reliability and validity of the findings. The data that were gathered was compiled and subjected to suitable statistical analysis like cumulative frequency method, percentage analysis and ranking method. The findings reveal that the most critical issues include high fluctuations in market prices, pest and disease outbreaks, inadequate storage facilities, and a lack of technical guidance. Economic challenges such as high input costs, difficulty in securing loans, and insufficient subsidies further exacerbate the situation. Marketing constraints, including poor transportation infrastructure and the absence of regulated markets, force farmers into distress sales. General issues like labor shortages and inadequate irrigation facilities add to the farmer burdens. To address these challenges, the study suggests implementing efficient irrigation systems, promoting integrated pest management (IPM) programs, establishing community-based storage facilities, and strengthening farmer cooperatives to enhance their bargaining power. Additionally, introducing government-backed procurement systems with minimum support prices (MSP) and improving access to financial services are recommended as the solutions. By tackling these constraints, the study aims to enhance the sustainability and profitability of turmeric farming in Erode District, ensuring a stable livelihood for the farmers.

The ‘Manifest Injustice’ Clause in Article 4 of the Hague Convention on Private International Law: Applicability in International Commercial Contract Disputes

This paper critically examines the ‘manifest injustice’ clause in Article 4 of the Hague Convention on Choice of Court Agreements, focusing on its applicability in international commercial contract disputes. The clause serves as a safeguard to ensure fairness in choice of court agreements by allowing courts to set aside agreements that result in unjust outcomes for one of the parties. The paper explores various contexts in which this clause applies, such as situations involving unequal bargaining power, fraud, duress, coercion, procedural injustice, and unconscionable terms. It also discusses the significant legal challenges associated with its application, including the lack of a clear definition, variability in judicial interpretation, conflicts with the principle of party autonomy, and evidentiary burdens. The paper concludes that while the ‘manifest injustice’ clause is a critical tool for promoting fairness in international commerce, its effectiveness depends on the development of clearer guidelines and more consistent jurisprudence to harmonize its interpretation across jurisdictions, thereby enhancing its role in ensuring justice and equity in cross-border contractual relationships.

Technology innovation decision‐making and optimal government subsidy strategy with endogenous bargaining power in a vertical supply chain

AbstractThis study presents a vertical supply chain model that considers bargaining power to explore independent innovation and co‐innovation decisions and their impacts and analyzes the optimal subsidy strategy for co‐innovation. We find that collaboration promotes technology innovation. Increases in consumer innovation preferences and government subsidies are conducive to co‐innovation. Both independent and co‐innovation can promote Pareto improvements under limiting conditions. Government subsidies can improve co‐innovation performance, but the subsidy parameter needs to be regulated. The optimal subsidy strategy is influenced by the subsidy target and budget. Governments prefer an innovative degree subsidy or a production cost subsidy.

Reading the Smoked Fish MSME Market Competition Map Through Analysis of Porter's Five Forces of Perception

Fisheries are a superior commodity and are still a favorite on the world market. Processed seafood that is quite interesting to discuss is smoked fish. The smoking activity itself provides several benefits, including: providing a preservation effect on fish meat, improving the taste of fish, and utilizing excess catches during the abundant fishing season. In the journey of Smoked Fish UMKM, of course there are various obstacles faced, including decreased turnover, lack of technological capabilities and marketing networks. Porter's Five Forces can be used to identify industry-specific competitive strategies for businesses. For Jrakahpayung smoked fish MSMEs to overcome the challenging competitive environment, competitive strategy planning is very helpful. Based on the analysis, Jrakahpayung smoked fish MSMEs are not too affected by the threats posed by business competitors because there are only a few comparable MSMEs. However, because the quality of the raw materials used must always be maintained so that consumers are loyal to Jrakahpayung smoked fish products, the threat to buyers and suppliers is quite high. On the other hand, consumer purchasing power automatically decreases if suppliers do not provide high quality raw materials. The total value of the threat of new entrants is 2.4 medium, the bargaining power of buyers is 3.5 high, the threat of substitutes is 1.9 low, the bargaining power of suppliers is 4.8 high, competition between existing competitors is 2.4 medium.