scholarly journals Transaction costs and corporate governance of sugar mills in Indonesia

2008 ◽  
Vol 6 (2) ◽  
pp. 283-297
Author(s):  
Ahmad Erani Yustika
Keyword(s):  
Corporate Governance ◽  
Transaction Costs ◽  
Agricultural Sector ◽  
Corporate Strategy ◽  
Transaction Cost Economics ◽  
Sugar Industry ◽  
Production Costs ◽  
Sugar Mill ◽  
Land Preparation ◽  
Sugar Mills

The sugar industry remains a priority for development in the Indonesian agricultural sector, especially in East Java. However, the performance of the sugar industry in East Java during the two last decades has declined, which is shown in the decreasing volume of production. This study utilized the analysis of transaction cost economics to identify the problems of the sugar mills in East Java – Indonesia. This research compares the transaction costs between state-owned (Ngadiredjo) and privately-owned (Kebon Agung) sugar mills. The study shows that in Kebon Agung Sugar Mill transaction costs are higher than production costs, while in Ngadiredjo Sugar Mill the reverse is true. However, the high transaction costs in Kebon Agung Sugar Mill cannot be attributed directly to inefficient institutions, because Ngadiredjo Sugar Mill incurred high costs for plants, land preparation, and fertilizer, which decreased the proportion of transaction costs. If analyzed in detail, the following facts are revealed: (i) market transaction costs in Kebon Agung Sugar Mill are higher than in Ngadiredjo Sugar Mill. This is because Kebon Agung Sugar Mill has established cooperation with sugarcane farmers in the form of extensions and transport subsidies; and (ii) the political transaction costs proportion in Ngadiredjo Sugar Mill is higher than in Kebon Agung Sugar Mill because of the imposition of many ‘illegal’ fees. There should be management (corporate) reform of sugar mills, both internal and external. Internally, sugar mill management must apply good corporate governance that guarantees the transparency and control of every activity. Nowadays, there is no controlling unit in sugar mill management that supervises corporate activity, so that it is susceptible to manipulation and mark-up. Externally, the relationship between sugar mill management (CEO) and the Board of Directors should be reformulated so that sugar mill management has wide authority to make corporate strategy decisions. Centralization of authority in holding firm (PTPN/PT. RNI) has caused high transaction costs as a result of the long hierarchy in decision-making.

scholarly journals Corporate governance and transaction cost economics: A study of the equity governance structure

2016 ◽  
Vol 12 (1) ◽  
pp. 33-44 ◽  
Author(s):  
Jimmy A. Saravia Matus ◽  
Silvia Saravia-Matus
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Governance Structure ◽  
Firm Valuation ◽  
Managerial Discretion ◽  
Full Analysis ◽  
First Time

This paper extends the Transaction Cost Economics (TCE) theory of the equity governance structure by introducing a (hitherto absent) full analysis of the key TCE issue of bilateral dependency between the firm and its shareholders. In addition, the paper discusses the implications of the analysis for the topic of corporate governance and firm performance. We find that when bilateral dependency holds contractual hazards are mitigated as predicted by TCE, but that when it does not contractual safeguards are altered to the disadvantage of shareholders and managerial discretion costs increase as reflected by lower firm valuation. Importantly, our study documents for the first time a class of transactions where business relationships persist indefinitely even though transaction costs are not minimized.

scholarly journals THEORY OF CONTRACTS IN THE LIGHT OF NEW INSTITUTIONAL ECONOMICS. THE SPECIFICITY OF AGRICULTURAL CONTRACTS

2018 ◽  
Vol 17 (4) ◽  
pp. 97-104
Author(s):  
Marzena Lemanowicz
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Institutional Economics ◽  
Agricultural Sector ◽  
Transaction Cost Economics ◽  
New Institutional Economics ◽  
Economic Literature ◽  
Contract Signing

The article reviews Polish and foreign economic literature regarding new institutional economics (NIE) and various research approaches used in the framework of NIE. Particular attention was paid to the economic theory of contracts and the transaction costs, as the limitation of transaction costs is indeed the main stimulus for contract signing. Special attention was given to agricultural contracts and their specificity. The article discusses different theories applied in the analysis of contracts, characterizes contracts according to different criteria, and draws attention to the importance of transaction costs in the theory of contracts. In addition, factors which contribute to these costs have been identified, indicating the necessity of adapting the principles of transaction cost economics to the needs of the agricultural sector.

Development and current status of the sugar industry in Sudan

2019 ◽  
pp. 655-659 ◽  
Author(s):  
Tageldeen S. Ibrahim ◽  
Tilahun S. Workneh
Keyword(s):  
Sugar Industry ◽  
Current Status ◽  
Sugar Mill ◽  
Sugar Production ◽  
Sugar Mills

The Sudanese sugar industry has been suffering from a decline of sugar production. The production of the six sugar mills has dropped in 9 years by 32%, from 775,000 t in 2008 to 526,000 t in 2017. At the Kenana sugar mill, which produces 50% of the country’s sugar, production declined by 25.8% in the period. Production also decreased by 24%, 50.2%, 36.1% and 42.7%, respectively, at the Guneid, Halfa, Sennar and Assalaya factories. The lower sugar production has led to the annual imports of about 599,500 t of sugar. The reasons for the decline in sugar production are discussed below.

Establishment and Production Costs for Peach Orchards in Florida: Enterprise Budget and Profitability Analysis

EDIS ◽  
2017 ◽  
Vol 2017 (4) ◽  
Author(s):  
Ariel Singerman ◽  
Marina Burani Arouca ◽  
Mercy A. Olmstead
Keyword(s):  
Discount Rate ◽  
Production Costs ◽  
Fixed Costs ◽  
Average Price ◽  
Land Preparation ◽  
Profitability Analysis ◽  
Enterprise Budget ◽  
Marketable Fruit ◽  
Peach Orchard

The article summarizes the establishment and production costs, as well as the potential profitability of a peach orchard in Florida. Our findings show the initial investment required for a peach operation in Florida to be $6,457 per acre; the expense in land preparation and planting alone in year 1 is $2,541 per acre. Variable and fixed costs in years 2 through 15 average $5,680 per acre. As an example of profitability, when using a 10% discount rate, an operation yielding 6,525 (7,254) pounds of marketable fruit per acre during its most productive years obtains a positive NPV when the average price is $2.38 ($2.13) per pound.

From transaction costs to transaction value: Overcoming the frictional paradigm

2020 ◽  
pp. 51-81
Author(s):  
D. P. Frolov
Keyword(s):  
Transaction Costs ◽  
Transaction Cost ◽  
Path Dependence ◽  
Transaction Cost Economics ◽  
Cost Minimization ◽  
Low Cost ◽  
Coase Theorem ◽  
Transactional Analysis ◽  
Transaction Sector ◽  
Transaction Value

The transaction cost economics has accumulated a mass of dogmatic concepts and assertions that have acquired high stability under the influence of path dependence. These include the dogma about transaction costs as frictions, the dogma about the unproductiveness of transactions as a generator of losses, “Stigler—Coase” theorem and the logic of transaction cost minimization, and also the dogma about the priority of institutions providing low-cost transactions. The listed dogmas underlie the prevailing tradition of transactional analysis the frictional paradigm — which, in turn, is the foundation of neo-institutional theory. Therefore, the community of new institutionalists implicitly blocks attempts of a serious revision of this dogmatics. The purpose of the article is to substantiate a post-institutional (alternative to the dominant neo-institutional discourse) value-oriented perspective for the development of transactional studies based on rethinking and combining forgotten theoretical alternatives. Those are Commons’s theory of transactions, Wallis—North’s theory of transaction sector, theory of transaction benefits (T. Sandler, N. Komesar, T. Eggertsson) and Zajac—Olsen’s theory of transaction value. The article provides arguments and examples in favor of broader explanatory possibilities of value-oriented transactional analysis.

Reversing Financialization

2018 ◽  
Author(s):  
Simon Deakin
Keyword(s):  
Corporate Governance ◽  
Corporate Strategy ◽  
Negative Impact ◽  
Focal Point ◽  
Employee Voice ◽  
Board Structure ◽  
Shareholder Primacy ◽  
Financial Interests ◽  
Legal Model ◽  
Legislative Framework

The debate over corporate governance is skewed by the common misunderstanding that shareholders are the owners of companies, and are entitled to have them run in their interest. The legal model of the firm is more nuanced, seeing the corporation as a complex entity characterized by co-operation between the suppliers of capital and labour, with a co-ordinating role for management. The elevation of shareholder primacy as a focal point for corporate strategy over recent decades is the result of government deferring to financial interests in the making of rules governing takeovers and board structure. Reversing financialization, and the negative impact it is having on social cohesion and innovation, will require a new legislative framework for corporate governance, with a greater role for employee voice and a reorientation of investment priorities.

Virtual enterprise networks: the fifth element of corporate governance

2001 ◽  
Vol 20 (3) ◽  
pp. 171-188
Author(s):  
Nicholas C. Georgantzas
Keyword(s):  
Corporate Governance ◽  
System Dynamics ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Virtual Enterprise ◽  
Dynamics Simulation ◽  
Enterprise Networks ◽  
Market Uncertainty ◽  
Competitive Edge ◽  
Exchange Governance

Although still flying low under the popular business media's collective radar, virtual enterprise networks (or nets) do receive increased attention in the strategic management literature. A virtual enterprise network (VEN) is a system of autonomous firms that collaborate to achieve common business objectives. VENs give participants a competitive edge in markets demanding agility and rapid response. Seen as an emerging transactional exchange governance (TEG) form within transaction cost economics (TCE), VENs and the relations among firms that form them posit challenges for researchers and managers. VENs differ substantially from markets and hierarchies, and from recurrent and relational contracts, utterly changing what it means to be a firm in today's business. This essay explores alternative TEG forms, their characteristics and the criteria that bear on the choice of corporate governance: flexible specialization, market uncertainty, product (good or service) complexity, reliance on trust, risk, self-organization, shared knowledge, and socio-territorial cohesiveness. The essay offers propositions on the relations among economic criteria and the choice of transactional exchange governance forms by exploring the dynamics of a generic TEG structure. This is a system dynamics simulation model that partially offsets the shortcomings of transaction cost economics (TCE) and points to the potentially rich contribution of system dynamics to exploring VENs beyond the ideal-type TEG forms of markets and hierarchies that dominate the TCE literature.

scholarly journals Novel Treatment of Sugar Mill Wastewater in a Coupled System of Aged Refuse Filled Bioreactors (ARFB): Full-Scale

Processes ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 516
Author(s):  
Rubén Fernando Gutiérrez-Hernández ◽  
Hugo Alejandro Nájera-Aguilar ◽  
Juan Antonio Araiza-Aguilar ◽  
Rebeca Isabel Martínez-Salinas ◽  
Carlos Manuel García-Lara ◽  
...  
Keyword(s):  
Oxygen Demand ◽  
Coupled System ◽  
Food Supplement ◽  
Full Scale ◽  
Sugar Mill ◽  
Daily Diet ◽  
Aged Refuse ◽  
International Regulations ◽  
Sugar Mills ◽  
Two Stages

Sugar is the most important food supplement of our daily diet. During the production, sugar mills use a large volume of water and produce a significant amount of wastewater polluted with high organic compounds. Therefore, it is necessary to treat the wastewater before their disposal. For this reason, this article presents the results obtained from the monitoring of a coupled system of aged refuse filled bioreactors (ARFB) in full scale to treat wastewater from a sugar mill. The coupled system consists of two bioreactors (a primary one -ARFB1- and a rectification one -ARFB2-) arranged in a series with identical geometries. The ARFB1-ARFB2 system was evaluated in two stages. The first stage (maintenance period) for 28 weeks, and second stage (Zafra season) for 29 weeks. The system was fed with sugar mill wastewater (SMW) with a chemical oxygen demand (COD) of 2787 ± 1552 mg/L and 2601 ± 722 mg/L, respectively. As results, we observed a rapid stabilization of the system over 2 months. In addition, we found the ARFB1-ARFB2 system achieved an average COD removal of 94.9%, with a final effluent (E2) concentration below the maximum permissible limits of Mexican and international regulations for all analyzed parameters. Finally, the results of this study show that the ARFB1-ARFB2 full-scale novel technology is an efficient process for removal of the main contaminants that affect the wastewater from the sugar mills.

Growth and Yield of Wheat under Irrigation by Sugar Mill’s Wastewater

2014 ◽  
Vol 24 (1-2) ◽  
pp. 211-218
Author(s):  
PK Kundu ◽  
TK Acharjee ◽  
MA Mojid
Keyword(s):  
Grain Yield ◽  
Fertilizer Application ◽  
Wastewater Irrigation ◽  
Growth And Yield ◽  
Sugar Mill ◽  
Yield Data ◽  
Full Dose ◽  
Sugar Mills ◽  
Irrigation Treatments ◽  
Mixed Water

The possibility of using sugar mill’s wastewater/effluent in irrigation was evaluated by investigating the effects of wastewater on growth and yield of wheat (Triticum aestivum cv. Prodip). The experiment was conducted at North Bengal Sugar Mill site in Natore during December 2011 to March 2012. Three irrigation treatments (I1: irrigation with fresh/tubewell water, I2: irrigation with a mixture of fresh and wastewater at 1:1 ratio and I3: irrigation with wastewater) under a main factor and three fertilizer treatments (F0: no application of fertilizer, F1: half dose fertilizer and F2: full dose fertilizer) under a sub factor were evaluated. The experiment was laid out in a split-plot design with three replications of the treatments. Wheat was grown with three irrigations totaling 14 cm applied at 4, 26 and 43 days after sowing (DAS). Important growth and yield data of the crop were recorded. The highest grain yield of 1.829 t/ha was obtained under mixed water irrigation and the lowest grain yield of 1.469 t/ha was obtained under wastewater irrigation. The three irrigation treatments, however, provided statistically similar (p = 0.05) grain yield. For the interaction between irrigation and fertilizers, mixed water irrigation and full dose fertilizer application (I2F2) provided significantly higher grain yield (2.757 t/ha) than all other treatment combinations. The second highest yield, produced under freshwater irrigation and full dose fertilizer (I1F2), was statistically similar to the yield under wastewater irrigation and full dose fertilizer (I3F2). Results of this experiment thus exposed good prospects of irrigating wheat by sugar mills’ wastewater.DOI: http://dx.doi.org/10.3329/pa.v24i1-2.19174 Progress. Agric. 24(1&2): 211 - 218, 2013

scholarly journals Firms' Choice of Regulatory Instruments to Reduce Pollution: A Transaction Cost Approach

2004 ◽  
Vol 6 (3) ◽  
pp. 1-20 ◽  
Author(s):  
Magali Delmas ◽  
Alfred Marcus
Keyword(s):  
Transaction Costs ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Command And Control ◽  
Governance Structure ◽  
Governance Structures ◽  
Negotiated Agreements ◽  
Regulatory Instruments ◽  
Market Opportunities ◽  
And Control

This paper compares the economic efficiency of firm-agency governance structures for pollution reduction using transaction costs economics. Two governance structures are analyzed with the transaction costs approach: command and control regulation (CCR) and negotiated agreements (NAs). We propose that the choice of governance structure depends on the strategies firms pursue given the attributes of their transactions and their market opportunities. The application of transaction cost economics analysis leads to different choices of regulatory instruments. Firms in more mature, stable industries are likely to choose command and control, while firms in new, dynamic sectors are more likely to opt for negotiated agreements. Frequency of transactions is a key factor in firm choice.

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