Journal
CHINA AGRICULTURAL ECONOMIC REVIEW
Volume 9, Issue 2, Pages 169-187Publisher
EMERALD GROUP PUBLISHING LTD
DOI: 10.1108/CAER-07-2015-0080
Keywords
Agricultural markets; Agribusiness; Lerner index; Marginal value products; Market power; Trader survey
Categories
Funding
- German Research Foundation (DFG) within Collaborative Research Centre 990
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Purpose - While traders of agricultural products are known to often exercise market power, this power has rarely been quantified for developing countries. The paper aims to discuss this issue. Design/methodology/approach - In order to derive a measure, the authors estimate the traders' revenue functions and calculate the marginal value products directly from them. The authors subsequently find the determinants affecting their individual market power. Findings - Results show that market power at the traders' level exists and is substantial. This market power is amplified in situations of extreme remoteness, and weakens with increasing market size. Originality/value - An exceptional data set with detailed information on the business practices of rubber traders in Jambi, Indonesia is employed with an innovative methodology to directly estimate revenue functions.
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