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Type: Journal article
Title: Allocative efficiency of agrifood traders: shrimp traders in Indonesia
Author: Yi, D.
Reardon, T.
Citation: Bulletin of Indonesian Economic Studies, 2015; 51(3):405-423
Publisher: Taylor & Francis Ltd
Issue Date: 2015
ISSN: 0007-4918
Statement of
Dale Yi, Thomas Reardon
Abstract: Shrimp is one of Indonesia's most important agricultural export commodities, with an annual export value exceeding $1 billion. If this high-value sector is to remain competitive and continue to grow, rural traders must be able to efficiently allocate scarce labour and factor inputs to trade shrimp. This study tests for factors leading to allocative inefficiency in the shrimp trade, by estimating a stochastic cost frontier on the basis of data from a survey of 200 shrimp traders in Central Java and South Sulawesi. Our results show that larger firms have a distinct cost advantage in trade and, owing in part to greater access to factor markets, are more efficient in allocating factors. Small firms can improve their allocative efficiency and become more competitive by specialising in trading one shrimp variety and by using output contracts to mitigate risk in the output market.
Keywords: traders; allocative efficiency; shrimp
Rights: © 2015 Indonesia Project ANU
RMID: 0030041781
DOI: 10.1080/00074918.2015.1107676
Appears in Collections:Global Food Studies publications

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