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Have Indonesian rubber processors formed a cartel? Analysis of intertemporal marketing margin manipulation

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  • Kopp, Thomas
  • Alamsyah, Zulkifli
  • Fatricia, Raja Sharah
  • Brümmer, Bernhard

Abstract

A high level of market-power within the rubber processing industry limits the spread of the wealth generated with exports in Indonesia’s Jambi province. The market-power of the crumb rubber factories is based on a high level of concentration. With an Auto-Regressive Asymmetric Threshold Error Correction Model, we study the price transmission at these factories. The extent of the threshold effect is studied, as well as the rents that are redistributed from the farmers to the factories. This is the first paper to quantify the additional distributional consequences of intertemporal marketing margin manipulation based on cartelistic or oligopsonistic market power.

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  • Kopp, Thomas & Alamsyah, Zulkifli & Fatricia, Raja Sharah & Brümmer, Bernhard, 2014. "Have Indonesian rubber processors formed a cartel? Analysis of intertemporal marketing margin manipulation," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182675, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae14:182675
    DOI: 10.22004/ag.econ.182675
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    Cited by:

    1. Yvonne Kunz & Fenna Otten & Rina Mardiana & Katrin Martens & Imke Roedel & Heiko Faust, 2019. "Smallholder Telecoupling and Climate Governance in Jambi Province, Indonesia," Social Sciences, MDPI, vol. 8(4), pages 1-28, April.
    2. Klasen, Stephan & Meyer, Katrin M. & Dislich, Claudia & Euler, Michael & Faust, Heiko & Gatto, Marcel & Hettig, Elisabeth & Melati, Dian N. & Jaya, I. Nengah Surati & Otten, Fenna & Pérez-Cruzado, Cés, 2016. "Economic and ecological trade-offs of agricultural specialization at different spatial scales," Ecological Economics, Elsevier, vol. 122(C), pages 111-120.
    3. Krishna, Vijesh V. & Kubitza, Christoph & Pascual, Unai & Qaim, Matin, 2017. "Land markets, Property rights, and Deforestation: Insights from Indonesia," World Development, Elsevier, vol. 99(C), pages 335-349.
    4. Kopp, Thomas, 2017. "Bertrand Competition in Oligopsonistic Market Structures - the Case of the Indonesian Rubber Processing Sector," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 261980, German Association of Agricultural Economists (GEWISOLA).
    5. Kopp, Thomas & Bümmer, Bernhard, 2015. "Moving rubber to a better place - and extracting rents from credit constrained farmers along the way," EFForTS Discussion Paper Series 9, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".

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