Domestic Buyers Research Articles

How U.S. tariffs impact China’s domestic sourcing: Evidence from firm-to-firm transactions

This paper investigates how tariff shocks influence the domestic performance of Chinese firms, leveraging quarterly data on both international and domestic transactions from 2017 to 2018. Our analysis uncovers several key findings: (i) a one percent increase in export tariffs leads to a 0.235 percent increase in sales to domestic buyers, suggesting that higher export costs drive suppliers to prioritize domestic markets, primarily affecting the extensive margin; (ii) a similar increase in countervailing import tariffs results in a 0.995 percent decrease in domestic purchases, underscoring a complementary relationship between China’s imported intermediates and domestic products; (iii) larger firms exhibit smaller magnitudes of domestic sales and are more likely to reduce their domestic intermediate inputs in response to a negative external risk. These findings highlight that understanding the complementary relationship between imports and domestic inputs is crucial for developing strategies to mitigate the adverse effects of tariff policies on domestic production.

Socio-economic determinants of pricing water for domestic use: A comparison of blocks and linear tariffs

This article explores a model in which an agency can adopt different tariff schemes (block tariff or linear tariff) for selling water to a domestic buyer (a household), considering socio-economic factors like household size and income level. Through the formulation and examination of a static game involving a buyer and an agency, where the latter considers also the buyer’s welfare in its decisions, the socio-economic determinants significantly affect the optimal pricing within each of the two suggested tariff schemes. This analysis leads to the identification of conditions under which the agency deems a block tariff more advantageous compared to a linear tariff, as well as circumstances where adopting a linear pricing strategy emerges as the optimal approach. By introducing a (discrete-time) dynamic extension of the model, in which the agency is assumed to operate as a boundedly rational agent, we investigate the role of the altruism that the agency decides to adopt toward the buyer, observing that it ends up affecting the price dynamics (defined by a gradient-like mechanism). In addition, we apply the model to the real case of the Apulia region in Italy, comparing the unit price currently applied in the region with the results of applying the model in the Apulian territory.

Improving approaches to the management, accounting and control of receivable debt in the period of martial law

In the period of martial law, when the economy of enterprises becomes especially vulnerable, the issues of management and control of receivables become critical. Bad and questionable debts become not only an element of financial losses, but also an important indicator of economic instability, which can lead to the threat of bankruptcy of enterprises. One of the key challenges of managing accounts receivable in martial law is uncertainty and unpredictability. Conflicting circumstances lead to changes in consumer demand, production processes and supply chains, which increases the risk of buyer insolvency. Businesses must improve their approaches to identifying and managing bad and doubtful debts. In this context, the formation of a reserve for doubtful debts becomes an extremely important aspect of the receivables management strategy. Improving the control of receivables also involves the effective use of technology and innovation. Automation of payment monitoring processes, identification of risky customers and analysis of financial stability can contribute to prompt response to changes and timely adoption of strategic decisions. The threat of bankruptcy of enterprises in the conditions of martial law requires from the management not only an effective response to current problems, but also a strategic vision of the future. Improving approaches to management, accounting and control of receivables during the period of martial law in Ukraine is an important task that requires an integrated approach to financial management. Stability in these conditions can be achieved through a sound strategy, improved processes and a relentless study of market and economic trends. The structure of subaccount 361 «Settlements with domestic buyers» has been improved. In particular, it is recommended to introduce new sub-accounts of the fourth order for detailing the terms of debt repayment by debtors and taking into account the periods of non-repayment. The model «Receivables 365: distribution and control by maturity» was developed, within which it is recommended to expand the ranges of classification of current receivables by maturity within one year. This will contribute to the strengthening of internal control over current receivables, taking into account the terms of its repayment by counterparties, and will allow determining the most critical calculations from the point of view of the approaching terms of their payment.

Economic feasibility of gasification scenarios in remote areas (the case of Sverdlovsk region, Russia)

Relevance. Structural changes in the Russian market create new trends, including energy supply in remote areas. The government is planning to redirect natural gas to domestic buyers. However, according to the estimates of biogas potential, it can fully meet the energy needs of households with no access to centralized gas supply. Research objective is to choose the optimal scenario of gasification in remote areas by evaluating the economic feasibility of several alternatives, including biogas technologies and the centralized gas supply system. Data and methods. The study focuses on the case of Sverdlovsk region and considers three scenarios of gasification in its remote areas. The method includes the calculation of the full discounted value of energy facilities, the comparison of their productive capacity, the analysis of the key external factors. Results. In terms of cost, the most economically feasible is the scenario of biogas plants using by individual households. However, accounting productivity, the scenarios based on the use of centralized gas supply or collective biogas plants. The economic feasibility of these two scenarios depends on the number of buildings serviced. Conclusions. The optimal scenario is the centralized gas supply. Despite its high costs, it can ensure the uninterrupted supply of the necessary energy amount to private households and does not depend on factors such as the availability of manure and organic waste and weather conditions. One more advantage is that Russia currently has a more elaborate and adequate legal framework regulating its use than for the other two options.

Channel preferences and attitudes of domestic buyers in purchase decision processes of high-value electronic devices

Channel preferences and attitudes of domestic buyers in purchase decision processes of high-value electronic devices

Channel Preferences in the High-Value Electronic Device Purchase Decision Process Regarding the Purchase Attitude among Domestic Buyers

Customer experience is influenced by the total purchasing decision process starting at the need recognition and ending at the post-purchasing stage. The IT development of the retail industry provides an opportunity and at the same time forces retailers to implement multi-channel strategies and give their consumers the opportunity to use the channels that best suit their needs at a given time for an enhanced shopping experience. The purpose of the study was to examine how Hungarian respondents’ purchasing attitude influences channel usage preference (instore, online big- and small screen) at different stages of customer journey when purchasing high-value electronic devices. For this purpose, the paper first identified homogenous respondent groups based on purchasing attitude factors, then explored the differences in the channel preference patterns at different stages of the purchasing process in customer groups separated by purchasing attitude. The purchasing attitude was measured using Likert scale in 7 priori dimensions including need of physical touch, impulsiveness, innovativeness, price and brand consciousness, convenience, and shopping experience. The research analyses collected data by quantitative online survey of 415 domestic respondents. The examined sample showed web-rooming behavior pattern and the homogeneous groups identified based on the purchasing attitudes of our respondents differed significantly in their channel usage preferences.

Do Foreign Buyers Pay More Than Domestic Buyers? Evidence from International Transaction-Level Data

In this paper, we examine the role of international capital flows in real estate prices by quantifying the extent foreign buyers overpay for their realty investments as well as the spillover effect of such behavior on property prices domestic buyers pay. Using a unique dataset accounting for about 30,000 realty investment transactions in Australia, Canada, France, Hong Kong, Japan, the Netherlands, the United Kingdom, and the United States, we find the following. First, foreign investors pay significantly higher prices than domestic investors, even after taking a wide variety of controls into account. Second, this paying over the odds becomes smaller the larger the buyers’ exposure to realty investments in the host countries. These results indicate that foreign investors are overcharged when they are less informed about the property market and that the extent to which they are overcharged decreases the more investment experience they have. Third, we did not find any significant spillover effects from overpaying by foreign investors to real estate prices in host countries. This finding is consistent with a group of extant studies employing aggregate-level data to examine the link between international capital flows and real estate prices.

Medical travel from north – east India: an assessment of domestic medical tourists’ travel profile and experience

ABSTRACT A significant segment of the global medical tourism industry is dependent on domestic medical tourists (DMTs)—the buyers of biomedical services within a country. However, in medical tourism in South Asia, academic and policy attention has primarily been paid to the international consumers despite the fact that a large part of the medical tourism business is dependent on domestic buyers. By gathering sporadic shreds of evidence on patients’ travel under the theme of domestic medical tourism, this study explores the differences in travel motivation and experience amongst the DMTs based on their socio-demographic and treatment profiles. In Northeast India, this study observed that demographic factors (age and gender) have the least impact on the movement of DMTs, while social factors (state of residence, sources of finance, nature of visitation) remain significant determinants. We also observe that amidst the chaos of regional disparity in healthcare resource allocation and need-based travel within restrictive medical travel conditions, DMTs are happier and more eager to travel to destinations which, apart from providing medical help, promise diverse tourism activities.

Creative Hubs in Hanoi, Vietnam

Creative Hubs in Hanoi, Vietnam

Russia Common electricity market of the EEU: Effects for Russia

The integration of the EEU economic space includes measures directed to create common electric power markets, however, theoretical and empirical scientific research does not allow us to speak unequivocally about the positive effects for all participants of such an integration alliance. The issue of creating a common electricity market of the EEU countries is also quite controversial in practice due to a number of existing regulatory and technical barriers. The presented work is proposed to consider the possible consequences of the creation of wholesale electricity markets for Russia. The author, using the autoregressive fractional-integrated moving average model, shows that the creation of a common electricity market of the EEU countries may be premature at the current level of technical capabilities and the structure of national markets. Obtained as a result of modeling forecast price of the general market exceeds the price of the domestic wholesale market in Russia. It can cause a disparity in supply and demand on the domestic and the general markets, that increases in prices for the domestic buyers with some probability. Thus, the integration effects of the creation of a common electricity market may not always be positive for all parties to the agreement, which means that the overall gain from lower electricity prices under such an agreement requires a comparison of the costs and benefits of the agent making the decision to join such an alliance.

INVESTIGATION OF QUALITATIVE PARAMETERS IN SOAP PRODUCED FROM BLEND OF NEEM AND CASTOR OIL

Soap is a chemical compound formed by interaction of fatty acids and metal radicals. Different types of vegetable oils have been found to be good candidates for soap production due to their saponifiable nature. However, edible oils are often expensive to use for soap production due to competing demand between commercial and domestic buyers. So, in this work, blend of nonedible neem and castor oils were used at different proportions to produce various soap samples. The foregoing was achieved via the two well-known processes of soap production, that is; the hot and cold processes. The work investigated the parameters that influence the quality of soap and determined their optimum values using various blends of the oils. Six samples were produced, and their properties analyzed and compared with two commercial samples to determine a blend with the most desirable qualities. The yield, foamability, pH, hardness and cleansing power of the produced soap samples were determined. It was found that the blend of 60 ml neem oil and 40 ml castor oil was the best with a yield of 70.4%, foamability of 11.8 cm, pH of 10.42 and a high cleansing power. The results were found to be consistent with those of the two commercial samples used as controls. Keywords: Castor, cleansing power, foamability, hardness, neem, oil, soap samples

Buyers’ Cartels: Prevalence and Undercharges

This article supplements information on 24 U.S. domestic buyers’ cartels cited in a 2010 book by Blair and Harrison by assembling and analyzing a sample of 49 episodes of buyers’ cartels that have international membership or multi-jurisdictional price effects. It appears that such cartels comprise less than 8 percent of the total, that they are clustered in primary-products and services industries, that they employ bid rigging conduct to a greater extent than sellers’ cartels, and that undercharges average close to 20 percent of the but-for price. These quantitative characteristics are supplemented by sketches of the conduct and prosecutions of a few of the better-documented cases of buyers’ cartels.

Chemical lean determination of boneless beef and lamb using a halogen moisture analyser

Context Chemical lean (CL) is an important metric used by the Australian meat industry to describe fat content of meat product. It is a minimum meat specification included in contracts between Australian vendors of bulk packed boneless manufacturing meat and overseas or domestic buyers and can be regarded as the complement of chemically determined fat in meat (% fat, CL = 100-% fat). The microwave moisture method is commonly used for measuring CL content of meat in Australian abattoirs, relying on a relationship between CL and moisture content of boneless meat. It is regarded as a quick and easy method to use. More recently, newer methods for moisture analysis have become available which may also be suitable for CL determination, including commercial halogen moisture analysers (HMAs). HMAs use a halogen lamp as a source of infrared radiation that is absorbed by a sample, which then results in moisture loss. Aims This study aimed to compare the use of HMAs for CL determination of beef and lamb to that obtained from Soxhlet extraction technique, which is the AOAC Final Action Method for determining fat in meat and accepted as the reference method for fat determination. Additionally, the study sought to validate the use of HMAs as a method for CL determination in the Australian meat industry. Methods HMAs were used to determine the moisture content of six beef and one lamb samples, which were used to calculate the CL content. The fat content of the samples was also determined using Soxhlet fat extraction. Passing-Bablok regression and Bland-Altman plot analysis were used to identify any differences and bias between the methods, respectively. Key results Passing-Bablok regression showed that there was no difference between methods, while Bland-Altman plot analysis indicated no bias was evident between the methods. While some differences were apparent between approaches either due to using moisture as a proxy for fat/CL compared with continual solvent extraction or sample heterogeneity, sufficient agreement existed between results to lie within an acceptance criterion of 1.2 CL units. Conclusion The use of HMAs was substantiated as a method for CL determination in the Australian meat industry and has been accredited by AUS-MEAT Ltd as a method for boneless beef and lamb. Implications HMAs can be used in the Australian meat industry for CL determination and represent a relatively simpler and easier approach for this important industry metric.

Impact of a Media Campaign on Consumers’ Purchasing Intentions of Legal Timber in Cameroon

Illegal logging is a key driver of deforestation in tropical countries and benefits a large number of stakeholders, including urban domestic buyers. Changing the latter’s purchasing behavior could produce significant shifts in the illegal trade market. Based on survey data (n= 463), this paper assesses the impact of a media campaign on consumers’ purchase intentions for legal timber and wooden furniture in Yaoundé and analyses the underlying psychological mechanisms. Combining covariate matching and mediation analysis, we found a significant positive effect of the media campaign on the declared intention to purchase legally-sourced timber and the mediation effect of two out of three precursors of the theory of planned behaviors, namely attitude and subjective norms. This study provides critical inputs to frame future media campaign messages and, by demonstrating some consumers’ interest in legal timber, to strengthen the domestic legitimacy of policies such as the Forest Law Enforcement, Governance and Trade.

THE SPILLOVER EFFECTS OF FDI ON LABOR PRODUCTIVITY OF FIRMS: EVIDENCE FROM THE FIVE PRIORITY MANUFACTURING INDUSTRIES IN INDONESIA

This study aims to investigate the effects of FDI spillover on labor productivity of the firms in the five priority manufacturing sector industries in Indonesia, namely food and beverages, textiles, wearing apparel and footwear, chemicals and pharmaceuticals, electronics, and automotive and transport equipment industries. Using unbalanced firm-level data from 2000 to 2015, we find positive spillover effects in the horizontal linkages, which measure the presence of foreign firms on the labor productivity of local firms in the same industry. However, the effects of FDI on the labor productivity of domestic in backward linkages shows negative results, which means foreign buyers fail to give benefits to domestic suppliers. Moreover, the relationship between foreign suppliers and domestic buyers in the forward linkages also show negative spillover effects. These findings are also in line when the analyses are disaggregated into each industry, except for the electronics industry. Based on the different results of the three linkages of spillover effects, our findings suggest that the FDI spillover has not provided comprehensive benefits for local firms.

Certifiably Responsible? Self-Regulation and Market Response in China

Do self-regulatory institutions in high-corruption environments attract more socially responsible firms? Or do irresponsible firms use self-regulatory institutions to shield themselves from scrutiny? Previous research suggests that self-regulation in these settings often attracts less responsible organizations (adverse selection). However, studying the SA8000 socially responsible employment certification in the high-corruption context of mid-2000s China, we show that firms holding the certification exhibited 11% higher average wages than non-adopters in the same industry and region. To explain this puzzle, we theorize the use of self-regulatory institutions in pursuit of reputation-sensitive buyers. Such buyers privately monitor their suppliers, making up for deficiencies in the institutional environment and reducing the expected returns of low-road firms bribing their way into self-regulatory institutions. Using longitudinal industrial microdata, we show that the wage advantage of self-regulators in China is indeed attributable to selection, with no evidence of a causal effect of self-regulation on wages. Consistent with our theory, foreign buyers and domestic buyers responded differently to self-regulation. In longitudinal analyses including subsamples balanced on levels and trends of pretreatment outcomes, exports increased markedly, and domestic sales did not. Finally, this form of self-regulation appears to pay off, with certification-adopters growing in size and showing slightly higher rates of firm survival.

Firm-specific resources and foreign divestments via selloffs: Value is in the eye of the beholder

In this paper, by using a large sample of foreign subsidiaries in Spain, we examine what explains their divestment via sell-offs. By integrating resource-based theory with foreign divestment literature, we examine the role that different subsidiary level resources and innovative capabilities play on its likelihood of being divested. We also argue and empirically show that the most influential subsidiary characteristics that determine divestment differ depending on whether the acquiring firm is a host-country firm or a foreign firm. Our results suggest that foreign subsidiaries are less likely to be sold off when they are characterized by high levels of product innovation performance, human capital or have introduced organizational innovations. Moreover, subsidiaries with export-market oriented capabilities were more likely to be divested to other foreign buyers whereas subsidiaries with domestic-market oriented capabilities were more likely to be divested to domestic buyers.

Does foreign investment enhance domestic manufacturing firms’ labour productivity? Evidence from a quantile regression approach

We provide new insights into the relationship between foreign investment and the labour productivity of domestic firms in the Vietnamese manufacturing industry. Using quantile regression analysis of a panel of firm-level data over a 2010–2015 study period, we find that the presence of foreign investment has a positive impact on domestic firm labour productivity through competition effects within the industry at the middle and high quantiles. We do not find significant evidence to support a positive relationship between foreign investment in downstream sectors and domestic firm labour productivity in upstream sectors, however. There are some indications that suggest a positive relationship between foreign suppliers in upstream sectors and labour productivity of domestic buyers in downstream sectors at the low and middle quantiles.

Estimating the direct and indirect impact of typhoons on plant performance: Evidence from Chinese manufacturers

We quantify the impact of typhoons on manufacturing plants in China. To this end we construct a panel data set of precisely geo-located plants and a plant-level measure of typhoon damage derived from storm track data and a wind field model. Our econometric results reveal that the impact on plant sales can be considerable, although the effects are relatively short-lived. Annual total costs to Chinese plants from typhoons are estimated to be in the range of US$ 3.2 billion (2017 prices), or about 1 per cent of average turnover. When we examine the channels by which plants react to a storm event we find that there is some buffering through an increase in debt and a reduction in liquidity. In terms of propagating the shock through foreign or domestic channels, our estimates suggest that plants prefer to reduce sales to domestic buyers more than foreign buyers and purchases from foreign rather than domestic suppliers. We also find some evidence of a negative indirect effect on turnover through spillovers from customers and a positive effect through damage to very nearby competitors.

Analysis of launch strategy in cross-border e-Commerce market via topic modeling of consumer reviews

Spurred by the policy of China’s Belt and Road Initiative, Chinese e-Commerce companies have found great opportunities in selling goods overseas. The cross-border e-Commerce shares similarities of launch and marketing strategies with domestic e-Commerce, but also has substantial differences. How to make strategic adjustments to better adapt to the overseas market is of great concern to cross-border e-Commerce companies. Analyzing behaviors of overseas consumers could offer an effective way to address this issue and has attracted great interest of researchers. Consumer comments, cheap and abundant by its nature, provides an easy access for analysis of consumer behaviors. In this paper, we focus on consumer reviews of a specific product, the cellphones, and apply topic modeling techniques to investigate the differences between behaviors of domestic and overseas consumers. We find that consumers from domestic and overseas focus on different aspects of product. In addition, the foreign consumers care more about product quality and tend to make description of technique details. On the contrary, domestic buyers pay more attention on consumer services and intend to comment in generalities. All these findings could help e-Commerce companies design better launch strategies in cross-border e-Commerce market.