Buyer's Market Research Articles

Green technology adoption in textiles and apparel supply chains with environmental taxes

Sustainability is crucially important in the textiles and apparel (TA) supply chains. In this paper, we evaluate the impact of clean technology adoption and environmental taxes on the TA supply chains. First, we consider a monopoly case, where a two-echelon supply chain consists of one buyer and one manufacturer. We find that raising the environmental tax rate motivates the manufacturer to invest in green technologies. We then extend our model to examine the duopoly case. We find that in the duopoly case, if the buyer's market share is sufficiently small (large), the optimal greenness level for this buyer's product decreases (increases) in the environmental tax rate; whereas if the two products market shares are relatively equal, the optimal greenness levels for both products buyers increase in the environmental tax rate. The existence of the spillover effect reduces the cost and improves the product greenness. Consumer welfare can be improved if the efficiency of green technology adoption and the coefficient of greenness level on market demand are sufficiently high. This result implies that if the government cares about consumers, the manufacturer should be encouraged to enhance the cost reduction ability in terms of green technology, and consumer education about sustainability consciousness should be enhanced.

MARKET MAKING WITH ALPHA SIGNALS

We show how a market maker employs information about the momentum in the price of the asset (i.e. alpha signal) to make decisions in their liquidity provision strategy in an order-driven electronic market. The momentum in the midprice of the asset depends on the execution of liquidity taking orders and the arrival of news. Buy market orders (MOs) exert a short-lived upward pressure on the midprice, whereas sell MOs exert a short-lived downward pressure on the midprice. We employ Nasdaq high-frequency data to estimate model parameters and to illustrate the performance of the market making strategy. The market maker employs the alpha signal to minimise adverse selection costs, execute directional trades in anticipation of price changes, and to manage inventory risk. As the market maker increases their tolerance to inventory risk, the expected profits that stem from the alpha signal increase because the strategy employs more speculative MOs and performs more roundtrip trades with limit orders.

The Global Value Chains and the Evolution of Chinese Economic Model

According to the Word Bank in the first 38 years of China Economic Reform took 700 million people out poverty line in China at same time benefiting the Global South economy due to the integration of the Transnational Enterprises Global Value Chains with China. Chinese government understood the economic rational of Global Value Chains, Flying Geese Model and Foreign Direct Investment Theories and introduced policies to attract foreign capital, technology, production, and foreign buyers, placing China as the final stage of the production networks in Asia and also transforming China in the biggest buying market of many resources and energy suppliers from less developed countries in Asia, Africa and South America. But a new model of Chinese economic development even more interconnected and interdependent with the world is now on move. Even quite before the world acknowledge the protectionist mindset of the US in Trump era, Chinese President Xi Jinping launched in 2013 a very ambitious initiative under the name of “One Road One Belt the 21st-Century Maritime Silk Road” to enhance a new stage of world globalization, which together with two complimentary initiatives the “International Production Cooperation” and “Third-country Market Cooperation” and in complementarity with the “Made in China 2025” and “Internet Plus” plans will lead China to develop Global Value Chains leaded by Chinese companies and integrating countries of Europe, Africa, Asia, and South America.

Market power and allocative efficiency loss: a comparative analysis on China's tobacco and food industries

PurposeThe effect of market power on allocative efficiency is one of the most important topics in industrial organization and has undergone rigorous investigation since the 1970s. However, empirical studies based on firm-level data are relatively rare, especially with regard to China's tobacco and food industries. Accordingly, this research measures market power and allocative efficiency loss (AEL) of the main tobacco and food industries in China with micro data at firm level. Subsequently, it conducts a comparative analysis on them.Design/methodology/approachThis research applies the New Empirical Industrial Organization (NEIO) model, consisting of five pricing and demand simultaneous equations to measure market power, and the AEL model to measure AEL induced by market power. To match with the micro data at firm level, the study implements a change in the traditional NEIO model by abandoning the aggregating process.FindingsEmpirical results show that China's tobacco industry, among five sectors selected, has the largest market power and thus the highest degree of AEL, whereas other sectors have apparently smaller market power and lower levels of AEL. Comparative analysis demonstrates a coarse positive correlation between market power and AEL in the selected industries. In general, the results accord well with the existing empirical findings and the reality.Research limitations/implicationsThis study has some deficiencies. First, owing to the limitation of high-quality data, the sectors analyzed in this research are insufficient to sum up all the characteristics and rules of China's whole food industry. Second, this research only analyzes seller market power and leaves out buyer market power, which could be a direction for future research.Practical implicationsThe relevant administrations should strictly limit the monopoly behaviors of enterprises and establish a favorable and competitive market environment, especially for the tobacco industry. This suggestion is precisely an important content of China's Supply-side Reform.Originality/valueThe research improves the NEIO model in that it can be estimated with micro data at firm level. To the best knowledge of the authors, very few empirical and comparative analyses exist on market power and AEL for China's tobacco and food manufacturers using micro data.

Illegal tobacco demand: The case of Western Balkan

This paper investigates tobacco smuggling in the Western Balkans, a region notorious as the main smuggling route for Western European countries. Data from a large-scale nationally representative survey from seven Western Balkan countries are used to explore smoking habits, attitudes about the illicit market, and characteristics of smokers associated with illicit market demand. Our results show that, while there are substantial differences between countries in the prevalence of illicit market purchases, the attitudes of people across countries are not dissimilar. The logit model is estimated to analyse the characteristics of illicit market buyers. The results show that purchasing on the illicit market can best be predicted by variables approximating people’s social status. People with lower income and higher levels of addiction are more likely to buy illegal tobacco.

The LBO-SBO Relationship

Since the beginning of the private equity industry in the 1980s, it has evolved and adopted new strategies and methods for generating returns to investors. As the industry grew, deals became harder to find as the buyer market grew immensely and what deals remained appeared picked over. Enter the secondary buyout (SBO). This strategy involves one financial sponsor buying a portfolio company from another financial sponsor. This thesis attempts to fill a gap in the field of research in two ways. First, this thesis analyzes the difference in value creation using a longitudinal and matched-sample approach. This approach is unique in that I will only analyze data for which information on the SBO, the preceding LBO, and the following exit are all available. Second, this thesis looks specifically at the relationship between LBOs and SBOs in an attempt to provide a practical application of the analysis. Additionally, most studies stray away from performing analysis on the U.S. market due to the limited data availability, but this approach ignores one of the largest private equity markets in existence. This thesis will look solely at U.S. buyouts. I find no significant difference in the relative change in enterprise value from acquisition to exit for LBOs or SBOs. Further, there is a statistically significant negative relationship between the holding period and annualized change in EV for both LBOs and SBOs. Finally, while the results were not significant, there is a slight negative relationship between the EV change of LBOs to the EV change of SBOs.

Perspectives of Australian property practitioners on sustainability features in residential property

Information on sustainability features in the Australian residential property market is available but not always shared with buyers by property practitioners (real estate agents, property valuers/appraisers and financiers/mortgage lenders and brokers), as it is not a regulatory requirement. This paper examines the perspectives of property practitioners on a range of sustainability features in residential property. Drawing insights from combined questionnaires and interviews, property practitioners seem to attribute different levels of importance to sustainability related information depending on whether they view the information from their professional perspective or from their clients’ perspective. The results obtained in both 2015 and 2017 confirm that practitioners’ perspectives seem to limit the amount and/or type of information they pass on to their clients. Clients are not considering sustainability features as they may not be aware on the existence of such information and are not informed by practitioners about the value of such information. If practitioners share more complete information within the property market buyers would be able to make more informed purchase decisions regarding energy efficiency, sustainable homes, and reduction in operation costs. The property practitioners themselves can utilise this information to have more targeted and information rich marketing strategies.

When one stock share is a biological individual: a stylized simulation of the population dynamics in an order-driven market

The demand–supply relationship plays an important role in an order-driven stock market. In this paper, we propose a stylized model by defining demand (supply) over a stock at a certain time as how many shares are on the bid (ask) side, which includes all buy (sell) limit orders and buy (sell) market orders. Also, we will treat the two types of shares as two different species with interaction (a single share corresponds to an individual of one species) and will construct and apply generalized Lotka–Volterra equations (Hofbauer and Sigmund in Evolutionary games and population dynamics, Cambridge University Press, Cambridge, 1998) to simulate how their population evolve based on some properties or assumptions of an order-driven market, and also on the heterogenous beliefs among traders. The model suggests that the population of bid and ask shares moves either to a fixed point or periodically without the impact of external information. Also, our model gives a reason, though it is not perfect, explaining why stock prices can behave chaotically.

Technology of management of economic potential of the enterprise

In the context of quality transformations of the economy and of the whole system of social relations, the problem of effective potential management becomes especially urgent. It is naturally linked to the main tasks facing the modern enterprise, and is a significant component of the efficiency of economic activity. The article highlights the importance of this research, because nowadays national companies have to resolve the contradictions caused by the imperfection of structural relations. There is a high degree of deterioration of equipment, lack of own financial resources, unavailability of loans due to high fees for their provision, low purchasing power constrains the demand for manufactured products. In the current situation, businesses are looking for internal opportunities, optimizing their use. It is noted that the problem of effective utilization of potential takes the leading place. Determination of the managed factors influencing on activity of the enterprise depends on the solution of this problem, making recommendations on their restructuring, improvement of the internal structure and management mechanism. In order to achieve the results, the manager must first of all know the essence of the economic potential of the enterprise. The economic potential of the enterprise, as synthetic characteristics of resource capabilities of different nature, determines the final results of production and commercial activity and their specific forms. In particular, taking into account the existing potential of the enterprise, major management decisions that were developed and made, restructuring of production and improvement of management mechanisms is carried out. Therefore, the author of the article argues that the effective use of the potential of the enterprise increases the competitiveness of products, which is especially relevant for national producers in terms of entry into foreign markets and transition of the national economy from the seller's market to the buyer's market. It is proved that, by actively using the accumulated experience, the modern enterprise can increase the efficiency of its activity. The result is achieved by activating the existing internal capabilities, significantly changing the existing strategy, reorganising and creating an effective management system, active management in the enterprise.

Innovative maintenance problem in a two-stage production-inventory system with imperfect processes

The specification of a product is frequently changed to satisfy new requirement from market buyers. To maintain market competitiveness, manufacturers must plan innovative production and sale strategies to achieve maximum benefit. This activity is known as innovative maintenance (IM). In this paper, we therefore consider a two-stage production-inventory model with replacement and imperfect component processes during which the components replacement is a common issue of IM. We then find the optimal production and sale strategies that minimize the total cost per unit time. An algorithm is proposed to find these optimal solutions. Finally, we quote two numerical examples from the Taiwan polyurethane industry to illustrate the proposed model and algorithm. Sensitivity analysis is also performed to obtain some managerial insights.

CLASSIFICAÇÃO GEODEMOGRÁFICA E A ASSIMETRIA NA DATAFICAÇÃO DE CRÉDITO

O mercado de compra e venda de dados pessoais tem papel de destaque na economia informacional. Diante do alto volume de informações pessoais, ferramentas de segmentação despertam cada vez mais interesse das organizações, já que por meio de tecnologias de big data, constroem perfis apurados da população. Para compreender as características deste tipo de classificação, analisamos a ferramenta de classificação geodemográfica Mosaic em contraposição a uma de suas aplicações na ponta do consumidor: o Score Serasa. O Mosaic classifica a população brasileira com base no seu poder de consumo em 11 categorias e 40 segmentos. Este método de categorização considera aspectos financeiros, geográficos, demográficos, de consumo, comportamento e estilo de vida. Por sua vez, o Serasa Score é ferramenta compulsória para algumas classes de cidadãos, que precisam entrar no jogo da otimização contínua de seus índices. O estudo analisa a opacidade dos sistemas e assimetrias da classificação geodemográfica.

70 Integrity Beef Alliance I. Program Overview

Abstract Noble Research Institute initiated a cow/calf best management practices (BMP) and marketing program in 2000. Over time, the Integrity Beef Alliance program has matured into a producer-run stand-alone Alliance that has received much favorable attention in the industry. The objectives of the program are: 1.) implement BMP’s, 2.) increase selling weights of calves, 3.) increase calf quality and uniformity, 4.) improve marketing efficiencies, 5.) utilize producer records for improvement, and 6.) educate producers to use of BMP’s. This program has developed stringent protocols that must be adhered to throughout the calf production phase. Protocols and requirements center on cow and bull genetics, herd health, preconditioning criteria, and record keeping. Producers who complete all required documentation and pay an annual membership fee are allowed to sell their calves through a value added calf sale, receive a letter of certification to provide to potential direct market buyers, or market through Superior Livestock Video utilizing the Integrity Beef Alliance logo. Through the utilization of financial and production records, members are able to benchmark themselves against other similar operations in the program and against their own performance over time to determine areas of needed improvement and areas of efficiency. Compared with the 2008 NAHMS data, producers have averaged a 28.6 kg increased weaning weight. Many producers have indicated a higher increase in weaning weight compared to their previous protocols. The program has grown from 11 producers in 2005 to 51 members in 2018.

Market making under a weakly consistent limit order book model

AbstractWe develop a new market‐making model, from the ground up, which is tailored toward high‐frequency trading under a limit order book (LOB), based on the well‐known classification of order types in market microstructure. Our flexible framework allows arbitrary order volume, price jump, and bid‐ask spread distributions as well as the use of market orders. It also honors the consistency of price movements upon arrivals of different order types. For example, it is apparent that prices should never go down on buy market orders. In addition, it respects the price‐time priority of LOB. In contrast to the approach of regular control on diffusion as in the classical Avellaneda and Stoikov (Quantitative Finance, 8, 217, 2008) market‐making framework, we exploit the techniques of optimal switching and impulse control on marked point processes, which have proven to be very effective in modeling the order book features. The Hamilton‐Jacobi‐Bellman quasi‐variational inequality (HJBQVI) associated with the control problem can be solved numerically via finite‐difference method. We illustrate our optimal trading strategy with a full numerical analysis, calibrated to the order book statistics of a popular exchanged‐traded fund (ETF). Our simulation shows that the profit of market‐making can be severely overstated under LOBs with inconsistent price movements.

Generating trading rules on US Stock Market using strongly typed genetic programming

Extracting rules from stock market data is an important and exciting problem, where investment decisions should be as clear and intuitive as possible in order for investors to choose the composition of their portfolios. Thus, it is important to guarantee that this process is done with a good framework and reliable techniques. In this context, portfolio composition is a puzzle with respect to selecting the appropriate assets and the optimal timing to invest. There are several models and algorithms to make these decisions, and in recent years, machine learning applications have been used to solve this puzzle with exceptional results. This technique allows a large amount of data to be processed, resulting in more informed recommendations on which asset to choose. Our study uses strongly typed genetic programming to generate rules to buy, hold and sell stocks in the US stock market, considering a rolling windows approach. We propose a different training approach, focusing the fitness function on a ternary decision based on the return prediction of each stock analyzed. The ternary rule matches perfectly with the three decisions: buy, hold and sell. Therefore, the rules are simple, intuitive, and easy for investors to understand. The results show that the proposed algorithm generates higher profits than the classical optimization approach. Moreover, the profits obtained are higher than the buy-and-hold strategy and the return of the indexes representative of the US stock market.

Estimating the sex buying behavior of adult males in the United States: List experiment and direct question estimates

PurposeEstimating the size of the sex buyer market in the United States has been stymied by methodological and sampling challenges. Given known methodological issues in self-reporting and the sensitive nature of purchasing sex, current research faces challenges in providing estimates of demand for purchasing sex. This study used a unique approach to estimate the prevalence of sex buying by men over the age of 18 in the United States. MethodsThis study employed a double list experiment and a direct ask question to a nationally representative sample of 2525 adult males to estimate the size of the sex buyer market in the United States. ResultsThe double list experiment found the prevalence of sex purchasing is roughly 1 of every 50 adult males in the U.S. (2%) over the 3 years. The direct ask questions found that roughly 1 of every 25 males in the U.S. (4%) had purchased sex in the past 3 years. How they purchased and who they purchased sex from was also explored. A total of 80 respondents reported buying sex during the past 3 years. They spent an average of $120 for their most recent sex-buying encounter. Most sex buyers reported buying sex from an offline venue (street, bar, or massage parlor) and 81% purchased sex from a female. Applying the estimate of sex buying behavior to the general male population in the U.S. results in approximately 4 million men over the age of 18 purchasing sex the past 3 years. ConclusionsThe findings from both the double list experiment and the direct ask question indicate that buying sex is a relatively rare phenomenon among adult males, however, when accounting for multiple purchases and extrapolating to the entire population the estimated purchases is in the millions. Applying the double list experiment and a direct ask question to a nationally representative sample provides a new way to capture estimates while addressing some of the limitations of previous methods. Such findings have implications for both the criminal justice and public health sectors.

A Cross Segment Analysis of Performance Variables of General Insurance Players in India

The general insurance sector has been dynamically changing and upgrading its business operations in the field of product development, product pricing, underwriting, actuary, claims management, risk management, asset and liability management, reinsurance and customer relationship management to be in line with ever changing regulatory and non-regulatory business norms over the years. These changes arise out of increased emphasis on liberalization and open market systems has transformed the orientation of domestic general insurance markets from that of sellers to a buyer's market. In the past two decades of post privatization operations, the sector has witnessed many challenges in terms of performance. The present study attempts to provide an insight into the behavior of the variables, which determines the performance of general insurance business in India. The formulation of econometric models based on the behavior of the variables influencing the performance of general insurance business in India across the segments of fire marine and miscellaneous will facilitate better decision-making and risk management processes of the players in the industry. The findings of the study are likely to help the policy formulators in bringing needed modifications to the existing policy and provisions to give further boost to the industry.

Buyer Market Power and the Model of Vertical Restraints in Agribusiness

This article considers an example of a vertical competition where downstream firms purchase agricultural food products from the consolidators (i.e. small traders) and the consolidators buy their saleable commodities from the small farmers. Here, the author identifies and explains a vertical model used by the large traders to collect the agricultural food products in India from the small farmers. The author tries to resolve the question whether it is possible to collect agricultural food products by the large traders at lower prices or not and to understand the competition between the small and large traders in agricultural food commodities in wholesale, as well as in the retail market in India.

Development of methodical approaches to the assortment management of pharmacy networks by principles of categorycal management

The most responsible business is determining the correct strategic course of the pharmaceutical organization and the directions of increasing its competitiveness, as it forms the priorities of its activities in the relatively long-term perspective. Management of assortment is one of the most important functions of any pharmacy. The modern markets characterized as "the market of buyers" actively demands the introduction of pharmacy networks of modern tools and technology management of product assortment.The aim of the work is to develop methodological approaches to managing the assortment of pharmacy networks on the principles of categorical management.Methods. Systematic and logical analysis, methods of comparative, documentary, structural-functional and economic-statistical analysis were used in this work.Results of the research. The algorithm for managing the product assortment in pharmacy networks was developed for efficient management of the assortment of pharmacy networks, which is based on the principles of categorical management, and involves: definition of product categories, their internal structure and signs, upon which the medicines will be grouped (according to ATC classification (first level)); analysis of the main financial and economic indicators by the selected product categories; determining the role of each product category in accordance with its influence on the achievement of pharmacy network's goals; studying the demand for each product category and its internal content; assessment of the current state of commodity categories, its structure and determination of possible changes in the work with its assortment content in the future; optimization for each product category of the entire chain of movement of goods from the purchase and formation of inventory to direct sales; substantiation of assortment policy on selected criteria and evaluation its efficiency; implementation assortment policy. The proposed methodological approaches were worked out on the example of one of the investigated pharmacy networks.Conclusions. It was proved that categorical management is an instrument of management assortment policy of pharmacy networks, which allows to allocate groups of pharmaceutical products, which will be aimed at fulfilling certain goals of pharmacy networks, which respectively will promote implementation of the strategy of pharmacy networks development

Information requirements for a data-based analysis of product and service complexity

Analysis of data is currently being discussed in research and practice across a wide range of areas, but mainly with focus on production. Improved data availability is not only a relevant factor in production, but also in other areas such as management of product as well as service complexity. A major challenge in this area is the trade-off between standardization and customer-specific solutions. However, the variety of products and services leads to an increased complexity and therefore increases costs. Transformation from a supplier to a buyer market, shortened product life cycles, rising speed of innovation and differentiation of customer needs have led to an increased product and service variety. As a result, offered products and services are growing in both, width through diversification and depth through variation due to a pursued differentiation strategy. Hence, companies must respond to increasing product and service complexity with an appropriate variant and complexity management.In the first step, this requires transparency about product- and service-induced complexity. This paper introduces a methodology for a systematic identification of complexity-relevant information requirements as well as corresponding data inputs. These information requirements form the basis for the design of a data model and provide input for analysis as well as visualization of complexity.

Mathematical Problems in Algorithmic Trading and Financial Regulation

We study algorithmic trading strategies in order driven markets. We make three contributions to the literature. One, we show how a market maker employs information about the momentum in the price of the asset to design liquidity provision strategies. The momentum in the midprice of the asset depends on the arrival of liquidity taking orders and the arrival of news. Buy market orders (MOs) exert a short-lived upward pressure on the midprice and sell MOs exert a downward pressure of the price. We employ high-frequency data to estimate model parameters and show the performance of the market making strategy. Two, we model the trading strategy of an investor who spoofs the limit order book (LOB) to increase the revenue she obtains from selling a position in an asset. The strategy employs, in addition to sell limit orders (LOs) and sell market orders (MOs), a large number of spoof buy LOs to manipulate the volume imbalance of the LOB. Our results show that spoofing considerably increases the revenues from liquidating a position. The spoof strategy employs, on average, fewer sell MOs (than a strategy without spoof LOs) and from executing roundtrip trades that are initiated by buy spoof LOs that are inadvertently filled and subsequently unwound with sell LOs. Spoofing is illegal and difficult to detect. We show that as the financial penalty for spoofing increases, the spoof strategy relies less on spoof LOs. There is a critical point where the gains from spoofing are outweighed by the financial penalty, so it is optimal no not to spoof the LOB. Three, we show how the supply of liquidity in order driven markets is affected if LOs are forced to rest in the LOB for a minimum resting time (MRT) before they can be cancelled. The bid-ask spread increases as the MRT increases because market makers (MMs) increase the depth of their LOs to protect them from being picked off by other traders. The expected profits of the MMs increase when the MRT increases. The intuition is as follows. As the MRT increases, there are two opposing forces at work. (i) The longer the MRT, the more likely the LOs are to be filled and, on average, shares are sold at a loss. (ii) because the depth of the posted LOs increases, the probability that the LO is picked off by other traders before the end of the MRT decreases. The net effect is that a longer MRT leads to a higher expected profit. We also show that the depth of LOs increases when the volatility of the price of the asset increases. Also, the depth of LOs increases when the arrival rate of market orders increases because it is less likely that LOs will be picked off by the end of the MRT. Finally, our model also makes predictions about the overall liquidity of the market. We show that MMs choose to supply the minimum amount of shares per LO allowed by the exchange because expected profits are maximised when liquidity provided is lowest.