Modelling inter-firm competitive rivalry in a port logistics cluster: a case study of Melbourne, Australia

PurposeThe paper models the effect of spatial clustering on various dimensions of inter-firm competitive rivalry among port logistics firms using Porter's five forces model.Design/methodology/approachA survey-based quantitative approach is adopted to collect data from logistics firms, which are directly or indirectly dependent on the Port of Melbourne in Australia. A structural equation modelling (SEM) technique is used to examine the theorised relationships between various dimensions of inter-firm competitive rivalry and the tendency of spatial clustering of logistics firms in the vicinity of Port of Melbourne.FindingsThe results indicate that the inter-firm competitive rivalry increases significantly when logistics firms are spatially clustered. This effect is further augmented when they cluster around the port. Co-location of firms near the port tends to increase “bargaining power of buyers”, whilst indirectly affecting “competitive rivalry” via “threats of substitutes”. This indicates that co-location enhances the bargaining power of buyers through the greater availability of substitute services that in turn promotes competitive rivalry among firms. However, co-location has an insignificant effect on “barriers to entry” and “bargaining power of suppliers”. Low entry barrier thus favours high competitive rivalry among firms. Hence, this paper validates the Porter's cluster and five forces models that confirm the positive effect of port logistics clusters (PLCs) on bargaining power of buyers and indirect effect on competitive rivalry partially mediated through threats of substitutes.Practical implicationsThis study provides empirically grounded evidence for firms to evaluate co-location decision choices and help buyers and sellers to devise business strategies to enhance inter-firm competitive rivalry and bargaining power.Originality/valueThis is the first systematic attempt to empirically validate Porter's five forces model in the context of PLC. Furthermore, the conceptualisation of PLC concept both as spatial and functional constructs (i.e. dependency on port) is novel. This study thus has broadened the meaning of cluster from a geographic entity to a more useful functional construct to reflect inter-firm dependencies.

Mali's transition to elections will be prolonged

Significance Malian authorities on January 1 proposed a five-year delay to elections that were due to take place in February. The proposal came after Mali’s National Conference on Reconstruction formally recommended that the transition be extended by at least six months or up to five years beyond February. Impacts Despite army claims that soldiers are eliminating scores of jihadists, much of Mali's territory is outside government control. The now-confirmed presence of Russian military trainers may give the junta more bargaining power in negotiations on the electoral timetable. The government is weak on economic policy and will struggle to stem the rise in food prices.

ABC Cost Driver Framing and Altering the Balance of Power in Customer-Supplier Negotiations

This study examines how activity-based costing (ABC) cost driver framing affects suppliers’ ability to increase their bargaining power when facing powerful customers. Results of an experiment show that suppliers with high potential to contribute to increasing joint profits are able to increase their power and earn a higher share of joint profits than suppliers with low contribution potential. However, providing suppliers with externally framed cost drivers (cost drivers represented as customers’ activities) instead of internally framed cost drivers (cost drivers represented as suppliers’ own activities) reduces their ability to utilize contribution potential as a source of power. Analyses of negotiators’ behavior show that suppliers with high contribution potential and internally framed cost drivers use more integrative tactics to increase joint profits, allowing them to earn higher shares of joint profits. This study shows that the how firms frame cost drivers affects negotiators’ ability to improve joint profits and negotiation power.

INCENTIVE MECHANISM FOR PERFORMANCE-BASED PAYMENT OF INFRASTRUCTURE PPP PROJECTS: COUPLING OF REPUTATION AND RATCHET EFFECTS

The performance-based payment PPP model has been widely used in the infrastructure projects. However, the ratchet effect derived from performance-based reputation incentives has been largely overlooked. To overcome this shortcoming, ratchet effect is considered in the performance-based payment incentive process. A multi-period dynamic incentive mechanism is developed by coupling the reputation and ratchet effect. The main results show that: (1) Under the coupling of reputation and ratchet effects, the optimal incentive coefficient in the last performance assessment period is always greater than that of the first period. The bargaining power can replace part of the incentive effect; (2) Due to the ratchet effect, if the government improve performance targets through performance adjustment coefficients, it needs to increase incentives to overcome the decreasing effort of the private sector; (3) When the bargaining power and punishment coefficient are small, the reputation incentive is replacing the explicit incentive. The increasing incentive coefficient would make the ratchet effect dominant the reputation effect; (4) To prevent the incentive incompatibility derived from the ratchet effect, the government should increase the incentive while increasing the punishment to achieve the “penalties and rewards”. This study provides theoretical and methodological guidance to design incentive contracts for infrastructure PPP projects.

Intrahousehold Bargaining Power in Spain: An Empirical Test of the Collective Model

This paper analyzes the intrahousehold bargaining power of spouses in Spanish families, in a collective framework. We estimate household labor supply equations and, under certain testable restrictions, we obtain a theoretically derived sharing rule for household income, which characterizes intrahousehold bargaining power. Then, using unique data on decision-making in the household, we construct Pareto weights, and study the validity of the collective model by comparing the theoretical sharing rule and the constructed Pareto weight. The results reveal that both the observed Pareto weight and the theoretical sharing rule display qualitative similarities, thus providing direct empirical support to the collective model. Furthermore, the results suggest that Spanish wives behave more altruistically, while husbands behave more egoistically. This should be taken into account by policy makers and researchers when analyzing inequality in the household, and contemplating specific policies affecting the household.

Evaluating Agricultural Value Chains on CISS-F Framework

Technology, institutions and markets together drive agricultural value chains in becoming more competitive, inclusive, sustainable and scalable, and in improving access to finance. Institutions that focused on aggregating marginal and smallholders, empowering farmers with better bargaining power, inducing economies of scale and creating market linkages have been pivotal in the successful transformation of these sectors.

Low carbon joint strategy and coordination for a dyadic supply chain with Nash bargaining fairness

<p style='text-indent:20px;'>In the paper, fairness concern criterion is utilized to explore the coordination of a dyadic supply chain with a fairness-concerned retailer (acting as a newsvendor), who is committed to low carbon efforts. Two models are developed for stochastic demand disturbances in the forms of multiplicative case and additive case, respectively. Firstly, the optimal joint decision of the retailer and the supply chain are proposed in two scenarios, i.e., decentralized decision and the centralized decision. Secondly, in order to realize channel coordination, the contract of revenue sharing combined with the mechanism of low-carbon cost sharing is designed. Moreover, the influences of the retailer's fairness concern and bargaining power on the joint decision and the contract parameters are also investigated. Finally, numerical examples are given to illustrate the theoretical results and some suggestions to supply chain management are also provided. The results show that the revenue sharing contract can make the supply chain achieved coordination with the cost sharing mechanism of low-carbon efforts. Furthermore, the optimal low-carbon effort level and ordering quantity decrease in terms of fairness-concerned parameter and Nash bargaining power parameter, which increases in unit cost. However, the optimal pricing makes the opposite change.</p>

Downstream competition and profits under different input price bargaining structures

In a vertically related duopoly with input price bargaining, this paper re-examines the downstream firms’ profitability under different market competition degrees. It is shown the rather counterintuitive result that downstream firms earn highest profits with semi-collusion, whose level depends on the upstream bargaining structures, the relative parties’ bargaining power, and the parameters measuring the degree of product differentiation in the downstream market. Concerning social welfare, the key result is that policymakers can tolerate some degree of collusion with decentralized bargaining structures; centralized structures advise for a more procompetitive policy.

Demand Allocation and Profit Sharing to Improve Salt Farmer’s Revenue: A Cooperative Game Approach

The main problem of the salt supply chain system is the oligopoly market structure dominated by middlemen which reduces the bargaining power of farmers. It has, however, been discovered that vertical collaboration (farmers to cooperatives) and horizontal collaboration (farmers to farmers) models have the ability to increase farmers' revenue. Therefore, this research was conducted to determine the effect of both horizontal and vertical collaboration models on the salt supply chain system with the expectation to increase farmers' revenue. This involved the application of the cooperative game theory with Shapley's value used as the basis for decision making. The result showed that the collaboration of stakeholders in the salt supply chain system has the ability to increase farmers' revenue, especially when they sell a maximum of 20% of their products through cooperatives and the rest through middlemen. This means the existence of farmers as cooperative members has a positive impact as observed in the revenue increment. Therefore, it is recommended that cooperatives improve their functions and roles as providers of savings and loans and market seekers, determine the appropriate prices for salt, and improve the quality of the products produced by their members. Moreover, a collaboration between farmers is mutually beneficial and this means efforts should be made to ensure cooperation, especially for small farmers.