Large Buyers Research Articles

Japan’s Energy Policy towards the SCO Member States: Current Situation and the Perspectives

The Shanghai Cooperation Organization is undoubtedly an important economic and geopolitical player in the Central, East and South Asia regions, bringing together countries of different size and potential. This is primarily about the economy and energy sectors, but the military-strategic partnership within the framework of the association shouldn’t be ignored too. Japan does not have a coherent policy towards the SCO as a single structure, at least it is not reflected in official documents, but individual member States are of significant interest. These are mainly Russia and China, and Russia is considered as one of the chief energy resources suppliers, which contributes to the implementation of the Japanese concept of energy security, aimed at maximum diversification of supply geography. China is regarded as one of the largest buyers of Japanese high-tech industrial products and an exporter of coal. The countries of the Central Asian region, which are rich in energy resources and do not have sufficient financial and technological capabilities to explore them, are also attracting more and more attention from Japan, but there is great competition with Chinese companies. India and Pakistan, that joined the SCO in 2017, are important for Japan as a counterweight to China’s expansion in South Asia and also markets for Japanese nuclear power plant construction technologies and various types of renewable energy generators. All in all, Japanese energy policy towards the SCO member States is balanced and flexible, but the presence of certain geopolitical contradictions with the founders of the organization still hinders the building of a meaningful multilateral dialogue, although options for involving Japan in the Shanghai Cooperation Organization periodic work, for instance, in the observer status, have been repeatedly voiced.

Concurrent Business and Buyer–Supplier Behavior in B2B Auctions: Evidence from Truckload Transportation

Buyers often procure distinct goods and services from the same supplier. Accordingly, business exchanged in one setting may affect exchanges between the buyer and supplier in other settings. We study how business procured via online business‐to‐business (B2B) auctions is affected by business exchanged between the buyer and supplier concurrent to the auctions (concurrent business). Using two transactional datasets, one with auctions held by a large buyer of transportation services over a 4‐year period and another with the buyer's transactions with suppliers over the same time period but governed by long‐term contracts, we analyze whether the contractual business affects decisions made in the auctions. We find that the buyer's auction–invitation decisions are affected by a supplier's auction performance and the presence and magnitude of the concurrent business relationship, showing that relationships still matter when buyers use online B2B auctions for procurement. After the concurrent relationship ends, auction invitations eventually cease; this effect, however, is moderated by the supplier's performance in the auctions. Concurrent business also affects supplier decisions in the form of reference prices. When a buyer and supplier have a preexisting price for the service up for auction, the supplier at times substitutes that for their bid price, with considerable heterogeneity explained by a supplier's business model, market conditions, and the recent usage of the contract price in the concurrent relationship. The business relationship external to a B2B auction significantly affects the decisions made within an auction through multiple mechanisms.

DETERMINATION OF THE FOREIGN ECONOMIC POTENTIAL OF UKRAINIAN WINE INDUSTRY IN THE WORLD MARKET

Topicality. Ukrainian export strategy for 2017-2021 determines food industry as one of the key elements of the country's foreign economic potential. Despite the secondary importance of wine in meeting the basic human needs, wine industry plays an important role in filling the budget of the country, ensuring the socio-economic development of regions. The wine sector is a perspective direction for the development of Ukrainian economy, an integral part of its foreign economic potential because of favourable natural and climatic conditions and existence of labour and other resources of high quality.Aim and tasks. The purpose of the article is to determine the foreign economic potential of Ukrainian wine industry in the world market. To achieve the goal, following tasks have been set and solved: definition of production potential of Ukrainian wine industry; assessment of consumer potential of Ukrainian wine market; study of trends of export-import activity of market operators (volumes of export, import, foreign trade turnover, balance of export and import operations, geographic structure of export and import).Research results. According to the research results of Ukrainian wine industry in 2014-2018, it is established that the production potential of Ukrainian wine market is decreasing. This can be explained by the decrease in the area of grape plantations in the fructiferous age, the declining dynamics of the index of industrial products, the growth of depreciation, the decrease in the average number of staff members, as well as the decline in consumer market potential (due to a decrease in the number of target consumer segment, in the share of spending on alcoholic beverages and tobacco products, the growth of average consumer prices, the prohibition of the promotion of wine etc.).According to the export-import activity in monetary terms Ukraine is a net importer of grape wines. However, in terms of volume, the volumes of wine exports are dominated by imports. Such contradictions in data in both physical and monetary terms can be explained by the low cost of Ukrainian exports. The average price of 1 litre of exported Ukrainian wine in 2018 is 3.5 times lower than the cost of 1 litre of imported one. The geographic structure of demand for Ukrainian wines varies: the share of CIS countries and Europe is decreasing and the share of Asian countries is increasing. The largest buyers of Ukrainian wine are: Russian Federation, Georgia, Azerbaijan, Kazakhstan, and China. The geography of the import of grape wines has the opposite structure: a significant proportion is being taken by the European countries, the smallest – by the “new wine regions”: America, Africa and Australia and Oceania.Conclusion. The analysis of the indicators of functioning of Ukrainian wine industry shows that at present, it can not claim the position of an influential player in the market. There is a significant natural and climatic potential, but there is a number of problems that hinder the development of foreign economic potential. These problems are: problems related to the political and legal environment; problems of production potential; problems of consumer potential; foreign trade problems; retail problems.

Predictable End-of-Month Treasury Returns

We document a distinct pattern in the timing of excess returns on coupon Treasury securities. Average returns are positive and highly significant in the last few days of the month, and are not significantly different from zero at other times. A long Treasury position for just the last few days of each month gives a high annualized Sharpe ratio of around 1. We attribute this pattern to temporary spikes in investor demand for specific securities due to window dressing and portfolio rebalancing. We find evidence in quantities that aggregate insurer transactions contribute to the end-of-month price pattern. In particular life insurers are large net buyers of Treasury securities on benchmark index rebalancing dates.

Financeirização do Capital, “Reformas” Estruturais e Seguridade Social no Brasil

O texto objetiva evidenciar os determinantes das “reformas”estruturais da seguridade social brasileira, no processo de financeirizaçãodo capital. Resulta de pesquisa bibliográfica e documental, com referencialteórico histórico-crítico. Aborda o contexto atual de crise estruturalda economia capitalista; as medidas implementadas pelo capital e peloEstado para combater os efeitos da crise, evidenciando o processo definanceirização do capital; analisa a utilização do fundo público nestaconjuntura e as consequências que acarretam para a seguridade socialbrasileira. Diante desta perspectiva, percebe o papel crucial do Estadono processo de negociações transnacionais entre os grandes gruposmonopolistas. Seja por meio de sua atuação como grande comprador deinsumos diversos, como também como grande devedor, daí a importânciadas dívidas públicas neste processo. Ademais, destaca o retrocesso dosdireitos sociais, por meio do enxugamento do financiamento da seguridadesocial, para geração de superávit primário, fortalecendo o processo definanceirização da economia mundializada.

Access and Adoption of Hybrid Seeds: Evidence from Uganda

Abstract Adoption of hybrid seeds remains low in many low-income countries. We conduct a field-experiment designed to measure the effect of offering hybrid maize seeds for purchase during a time when potential customers have high liquidity. Working with a large buyer of agricultural commodities in Northern Uganda, we randomly offer smallholder farmers the opportunity to purchase certified hybrid maize seeds at the same time as they visit the buyers’ stores to sell crops from a previous harvest. 16% of those offered purchase hybrid seeds, and average adoption of hybrid maize among those offered increases by 8 percentage points compared to a control group who does not receive the offer. Among those who accept the offer, we see an increase in the propensity to plant hybrid maize of 50 percentage points. This effect is more pronounced for female farmers than for their male counterparts. Our findings suggest that providing access to certified agricultural inputs at the place and time of post-harvest sales is a promising strategy to increase input usage.

Effects of co-creation on organizational performance of small and medium manufacturers

Co-creation, the joint effort of diverse stakeholders of an organization to enhance the value creation process, is a key in developing shared goals. However, the recent trend of an increasing number and size of mammoth buyers has put the smaller manufacturing suppliers in subordinate roles and relegated their goal to survival. This study, by examining the effect of co-creation on the performance of small and medium manufacturers (SMMs) that supply parts or components to large corporate buyers, found that co-creation does have a significant positive impact on organizational performance through their enhanced strategic advantage. Thus, co-creation is not only important to just large organizations, but even more so to SMMs, as it elevates them from a win-lose relationship to a collaborative partnership with their large buyers. This study makes both theoretical and practical contributions as it is one of the first empirical studies that analyzed the impact of co-creation on SMMs' performance.

Dynamic Strategic Procurement from Capacitated Suppliers

Many industries are characterized by large buyers and suppliers whose decisions are influenced by the strategic interactions among these parties. Here we present an economic model for a monopolistic buyer that needs to procure a critical item from two candidate suppliers competing to win the buyer’s account. The buyer’s objective is to design a procurement process that minimizes its total cost. We analyze this problem under one static and two dynamic procurement design choices and investigate the impact of these choices and capacities on supplier profits and buyer’s procurement cost. All three processes are modeled as non‐cooperative games and solved under suitable equilibrium concepts. We have found that when the buyer can choose purchase quantities independent of quoted prices, dynamic procurement can lower its cost by as much as 50% when compared to static procurement. However, when the buyer is constrained to set a precommitment quantity and award sales starting with the low priced supplier, the savings obtained from dynamic procurement diminish, but the buyer can still save as much as 12.5%.

Costs for thinning and final felling operations in Sweden, 2000–2017

ABSTRACTWood supply is one of the most significant cost items for most forest industries, and costs of forest operations and sale prices of wood is vital information for forest owners. Cost trends between 2000 and 2017 in Swedish forestry is analysed, separately for final felling and thinning, and subdivided into ordinary and salvage operations. Data on costs for operations totalling 821 million m3 harvested roundwood were analysed, both as actual costs and after adjustment for the consumer price index. Adjusted costs for ordinary harvesting operations declined between 2000 and 2007, increased during 2008 and 2009 and have since been relatively constant. Costs of salvage logging operations performed as thinning were 21% higher than ordinary thinning, and when performed as final felling costs were 64% higher than in ordinary final felling. The relative logging cost trends in Sweden and Finland were similar during the period, and there are similarities with the US. However, while logging costs in Sweden and Finland increased in 2008 and 2009, they declined in the US and did not reach the same relative level as in Sweden until 2013. Results can be used for benchmarking logging costs between regions or larger buyers of logging services.

A Permissioned Blockchain Business Model for Green Sourcing

Problem Definition: End-consumers pay substantial price premia for green certified sustainably sourced products. In addition to the cost of sustainable practices themselves, record keeping required to keep track of those practices and auditing by certifying agencies are costly for the supplier. To make matters worse, information problems among supply chain partners -- moral hazard, adverse selection, and hold-up -- hinder both investments in technology and efforts toward green certification. We investigate whether the pairing of a new technology like blockchain with an access-based business model, where users of a technology pay for access rather than make large up-front investments, can alleviate these three information problems. Academic/Practical Relevance: Moral hazard, adverse selection, and hold-up are pervasive information problems in supply chains. We examine whether and how the recent phenomenon of companies setting-up permissioned blockchains can help address all three information problems concurrently for green supply~chains. Methodology: We build a game theoretic model of the interaction between the buyer and the supplier. We extend existing models by explicitly modeling the supplier's operational decisions in an open market as the supplier's outside option rather than assume fixed outside option values. Results: The implementation of blockchain technology allows the buyer to share more of its green premium with the supplier -- lowering moral hazard. By appropriately pricing access, the buyer can induce a separating equilibrium and address the adverse selection problem. By placing the burden of investment in technology with the buyer, an access-based business model also eliminates the hold-up problem. Managerial Implications: Our results show that blockchain technology -- on its own -- cannot alleviate all of the information problems faced by a green supply chain. Large buyers need to pair blockchain technology with an access-based business model to unleash its full potential.

Green Public Procurement and the Innovation Activities of Firms

This paper provides first empirical insights on the relationship between green public procurement (GPP) and firms' innovation activities. Considering that the public sector is a large buyer in the economy, public procurement is able to work as demand-pull factor for new products and thus innovations - given that the procurement is aimed at such objectives. GPP is specifically implemented to contribute to more sustainable production and consumption. Using a novel firm-level dataset, this paper analyses whether GPP is able to trigger innovation activities within firms, and if so, whether these innovations are environmental innovations or not. The results show some support for a demand-pull effect of GPP on the probability of general product innovations but no conclusive evidence is found for environmental innovations.

Regional impacts of launching national carbon emissions trading market: A case study of Shanghai

This study investigates the impacts of launching a national carbon trade market through the IMED|CGE (Integrated Model of Energy, Environment and Economy for Sustainable Development|Computable General Equilibrium) model, between Shanghai and the Rest of China (ROC). Five scenarios are established by considering China’s Nationally Determined Contributions (NDC) targets, including a baseline scenario (BaU scenario), a carbon cap on ETS participating sectors scenario (CAPsec scenario), a carbon cap on Shanghai and ROC regions scenario (CAPreg scenario), a carbon cap scenario with local carbon emissions trading among ETS participating sectors (ETsec scenario) and a carbon cap scenario with inter-regional carbon emissions trading (ETreg scenario). The results under the ETreg scenario predict a carbon price of 164.64 USD/tCO2 and a total carbon trade volume of 189.91 Mt by 2030. The metal smelting sector will be the largest seller of emissions quotas in Shanghai, whereas the power generation sector will be the largest buyer. Due to its higher carbon mitigation cost and increasing autonomous carbon intensity, the aviation sector will face more challenges to reduce emissions among ETS participating sectors in Shanghai. The results indicate that launching a national carbon trade market could generate both economic and environmental benefits and help China achieve its NDC targets.

Large buyers at a fish auction: The case of the Norwegian pelagic auction

This paper explores the role of large buyers at the Norwegian pelagic auction. The auction is electronic, with no product inspections and conducted on a first-price, sealed-bid basis. Hedonic price modelling was applied to auction data for mackerel for the main seasons of 2013–2015, which comprise 2447 transactions accounting for a traded volume of 581,613 t. A key finding is that the largest buyers pay lower prices than smaller buyers, all else being equal. For example, holding transaction quantity and fish size constant, the largest buyer pay about 3% less than the small buyers, implying a discount of NOK49.9 million for the three years covered by the study. This is attributed to a better understanding of the auction, including other buyers’ valuations. In addition, only the largest buyers can handle the largest catches, so there is less competition and lower prices in this market segment. Another key finding is that, holding other factors constant, the largest buyers pay a lower price for fish size than that paid by small buyers. With transaction quantity held constant, the price discount for fish size is NOK 0.146 (per 10 g) for the largest buyer and the price premium for the small buyers is NOK 0.099 (per 10 g). Findings are discussed and compared with past research focusing on fish auctions. Practical implications are also discussed.

Wage Stagnation and Buyer Power: How Buyer-Supplier Relations Affect U.S. Workers’ Wages, 1978 to 2014

Since the 1970s, market restructuring has shifted many workers into workplaces heavily reliant on sales to outside corporate buyers. These outside buyers wield substantial power over working conditions among their suppliers. During the same period, wage growth for middle-income workers stagnated. By extending organizational theories of wage-setting to incorporate interactions between organizations, I predict that wage stagnation resulted in part from production workers’ heightened exposure to buyer power. Panel data on publicly traded companies shows that dependence on large buyers lowers suppliers’ wages and accounts for 10 percent of wage stagnation in nonfinancial firms since the 1970s. These results are robust to a series of supplementary measures of buyer power; instrumental variable analysis using mergers between buyers; corrections for selection and missing data; and controls for individual worker characteristics like education and occupation. The results show how product market restructuring and new forms of economic segmentation affect workers’ wages. The spread of unequal bargaining relations between corporate buyers and their suppliers has slowed wage growth for workers.

Acquisition in U.S. federal agencies: Evidence from the world's largest buyer

Acquisition in U.S. federal agencies: Evidence from the world's largest buyer

Game-theoretical model for marketing cooperative in fisheries

The classical game-theoretical models described the conflict in fisheries arising from harvesting a ‘common pool resource’ which without an efficient regulation leads to an overexploitation of a renewable but not unlimited resource, known as the ‘tragedy of the commons’. Unlike these studies, the present paper deals with a marketing cooperative of micro or small enterprises in fishing industry, formed to negotiate a contracted price with large buyers, sharing risk among members of the cooperative. In the paper a game-theoretical model for the behaviour in this cooperative is set up. By the time of the actual commercialization of the product, the market price may be higher than what the cooperative can guarantee for members, negotiated on beforehand. Therefore some “unfaithful” members may be interested in selling at least a part of their product on the free market, the cooperative, however, can punish them for this. This conflict is modelled with a multi-person normal form game. An evolutionary dynamics is proposed for the continuous change of the applied strategies, which in the long term leads to a particular Nash equilibrium, considered the solution of the game. This strategy dynamics is continuously influenced by an “exosystem” describing the dynamics of fishing, based on a classical fishing effort model. This approach focuses only on the conflict within the marketing cooperative, since it is supposed that the single enterprises fish from independent resources.

The Mechanism of Imported Iron Ore Price in China

This study analyzes the relationship and the issues between iron ore market from demand and supply side. It empirically explains how and why the import iron ore price in China fluctuates through Baltic Dry Index, Dollar Index, iron ore production, volume of import iron ore, and also compares the forecast ability between Vector Error Corrected Model (VECM) and ARIMA model. This paper concludes the following finds. Firstly, there is no structural break and seasonality. The data are first degree stationary and have 1 cointegration relationship between variables. In addition, the impulse response function shows that the import iron ore price is positively sensitive to BDI and negatively sensitive to Dollar Index, and it reveals the fact that China has less power to influence the iron ore price even if it has been the largest buyer. Finally, forecast ability assessment shows that VECM outperforms ARIMA model.

An Empirical Analysis of Countervailing Power in Business-to-Business Bargaining

Pricing schemes in business-to-business (B2B) relationships reflect price discrimination and bargaining over rents. Bargaining outcomes are determined by upstream market power and countervailing buyer power downstream. This paper uses a panel of B2B transactions in the UK brick market to study B2B transaction prices. The empirical analysis identifies three effects on prices: nonlinear volume and freight absorption effects; countervailing power effects that arise from buyers’ local commercial significance; and competition effects that are due to the buyers’ local potential suppliers. And it shows that small buyers benefit more from competition than do large buyers because they are not constrained by the suppliers’ capacity.

Buyer Intermediation in Supplier Finance

Small suppliers often face challenges to obtain financing for their operations. Especially in developing economies, traditional financing methods can be very costly or unavailable to such suppliers. To reduce channel costs, large buyers have recently begun implementing their own financing methods that intermediate between suppliers and financing institutions. In this paper, we analyze the role and efficiency of buyer intermediation in supplier financing. Building a game-theoretical model, we show that buyer intermediated financing can significantly improve channel performance, and can simultaneously benefit both supply chain participants. Using data from a large Chinese online retailer and through structural regression estimation, we demonstrate that buyer intermediation lowers interest rates and wholesale prices, increases order fill rates, and boosts supplier borrowing. Based on counterfactual analysis on the data, we predict that the implementation of buyer intermediated financing will improve channel profits by 13.05%, increasing supplier and retailer profits by more than 10% each, and yielding approximately $44 million projected savings for the retailer.The online supplement is available at https://doi.org/10.1287/mnsc.2017.2863 .This paper was accepted by Vishal Gaur, operations management.

Wage Stagnation and the Rise of Merchant Capitalism

This paper examines the link between stagnant wages and the increasingly concentrated power of large corporate buyers. With the rise of big-box retailers and other large intermediary purchasers, suppliers in industries like manufacturing and transportation, former bastions of middle-income employment, face pressure from buyers to reduce wages. Economic sociology predicts that buyer power can either decrease suppliers’ wages by destroying rents or increase wages by raising productivity through buyer-supplier collaboration. Panel analysis of data on publicly traded suppliers shows that supplier reliance on large buyers decreases suppliers’ wages. Instrumental variables analysis of mergers among buyers shows that these wage decreases result from increased buyer power. Increasing reliance on key buyers accounts for 10% to 15% of the decline in wage growth since 1978. These results show that the social structure of production markets can restrain wage growth.