The International Tea Cartel in the Great Depression: The Response of Firms in India and Ceylon
We use data from an international sample of 349 British owned firms to analyze the effectiveness of the International Tea Agreements of 1930 and 1933. These agreements were effective in reducing output overall; however, there were significant regional differences in the extent of compliance, with the firms located in Eastern India reducing output to a greater extent than firms in Ceylon or South India. These differences can be attributed to differences in firm size and organizational structures in these regions. We also use archival material to argue that the failure to collude in 1931 and 1932 was mainly due to a bargaining conflict between established producers and the newer plantations of Java/Sumatra.
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