When will trade restrictions affect producer behavior: Oligopsony power in international trade

,Oligopsony; Residual supply; trade

Changes in herring consumption in Russia

In the seafood category Russian consumers are adopting new species and new product forms at a rapid rate. We employ a panel data set on monthly per capita demand for different herring products in six Russian regions to test hypotheses on the structure of herring consumption. Our econometric estimates indicate significant structural regional differences in per capita consumption of different products. We find that whole herring is generally an inferior good, whereas fillet herring products tend to be normal goods. This suggests that if incomes continue to increase, consumption will shift further from unprocessed to value added herring products

New' and 'old' species meet new seafood market: Russian demand for imported seafood products

A food consumption revolution is taking place in Russia. After decades of severe constraints on food consumption options under the communist regime Russian consumers are now adopting new food products - including seafood products - at a high pace. Since Russian consumers have had limited seafood consumption choices before, the market can be seen as an interesting laboratory for investigating consumer responses to new products that were previously not available. The opening of the Russian economy has lead to a rapid growth in the imports of several species and seafood products. Among imported seafood products are both wild and farmed species. Furthermore, Russian imports include both traditional species such as herring, and "new" species such as pangasius. We analyse Russian monthly import demand data on several seafood products, such as herring, salmon and pangasius, by estimating demand equations. The empirical estimates of demand elasticities are linked to findings from surveys of Russian households to provide an analysis of central trends in Russian seafood consumption

Aquaculture Growth and the Fishmeal Trap

Fishmeal prices have increased sharply since the mid-2005 and the relationship between the prices of animal and vegetable proteins have become weaker, at least temporarily. This can be explained by a relatively constant fishmeal supply, which have varied around 6-7 million metric tons the last two decades, and an increasing demand. Although much of the recent price pressure has been attributed to the economic growth in China, it is the expansion of global aquaculture that is associated with increasing fishmeal demand. Estimated fishmeal usage in aquaculture is 53% in 2005, while pig and poultry use most of the remaining supply (Tacon, 2005). At first sight, this development can be interpreted as evidence of the fishmeal trap. However, little suggests that fishing pressure has increased and there seems to be only a small part of the increased fishmeal price that has been passed on to the price of fish feeds. Since the fish feed industry appears to operate with tight profit margins they have little ability to adjust prices over marginal cost. This implies that feed producer must substitute fishmeal for other ingredients in order not to pass on increasing fishmeal prices to fish farmers. In general, the aquaculture industry seems adaptable to changing input prices in marine resources. The largest impediment for continued aquaculture growth is not technical limitations. Many downstream buyers require farmed fish fed with marine raw instead of alternative nutrient sources. Hence, it is not the fishmeal trap that represents the most serious growth constraint for aquaculture, but consumer perceptions

On the Relationship between Aquaculture and Reduction Fisheries

Traditional aquaculture has to a large extent used herbivore species with limited requirements for additional feeding. However, in intensive aquaculture production one farm carnivore species like salmon and also feeds herbivore species with fishmeal as this increase growth. This has lead to a growing concern that increased aquaculture production poses an environmental threat to the species targeted in reduction fisheries as increased demand increase fishing pressure. In this paper we address this question along two lines. First, under which management regimes may increased demand pose a threat to the species in question. Second, we investigate what is the market for fishmeal. Is fishmeal a unique product or is it a part of the larger market for oilmeals which includes soyameal? This is an important issue since the market structure for fishmeal is instrumental for whether increased aquaculture production may affect fishmeal prices, and thereby increase fishing pressure in industrial fisheries

Modeling Demand for Fishmeal Using a Heterogeneous Estimor for Panel Data

Increased livestock and aquaculture production can put pressure on the fishmeal market, and thus industrial fisheries stocks, since both of these sectors use fishmeal in their feeds. Data indicate that fishmeal supply has reached a production limit due to limited marine resources. Meanwhile there has been an explosive growth in global aquaculture production in the last couple of decades while traditional livestock production continues to grow at a steady rate. This paper examines the impact this may have on the global fishmeal market and industrial fisheries using a derived demand analysis of fishmeal. Inelastic demand for fishmeal implies that prices are bound to increase strongly, which, furthermore, can limit growth of global aquaculture. We estimate a panel data model of fishmeal demand using a shrinkage estimator that allows heterogeneous estimators for individual countries. This is important for assessing the impact these two sectors will have on the fishmeal market. Our results show that the precision of predictions is substantially higher for a shrinkage estimator than for the OLS estimator and standard panel data estimators. Furthermore, econometric models estimated by OLS produce implausible elasticities for some countries. According to the empirical results from the shrinkage model total fishmeal demand is generally inelastic in own price. However, the own price elasticity has increased in absolute terms as salmon aquaculture production has increased relative to pig and poultry production. This implies that there is scope for reduced fishmeal consumption in the salmon industry when prices increase.Keywords: aquaculture, Fisheries Economics, demand, Fishmeal, International Seafood Trade: Rules Based Reform, shrinkage estimato

The Sensing of Frontline Employees Against Executive Expectations

The literature suggests that important strategic initiatives can derive from employees within the organization as they respond to needs and opportunities observed in daily operations. This seems to indicate that employees have a good sense of the firm’s operational capabilities observed through direct interactions with colleagues, customers and partners. Executives make their own judgments about the corporate capabilities from discussions with various managers, other executives and industry specialists. But, the information gathered by executives may be qualitatively different from the conditions sensed by the employees. So, we arranged a contest between operational capabilities assessed by employees and executives and the relationship to subsequent firm performance. Based on more than 400 individual data points collected from two medium-sized organizations over a period of eighteen months, advanced distributed lag time-series analyses show that the sensing of front-line employees (surprisingly) is a better medium-term predictor of organizational performance than executive judgments. These results have implications for the way organizations set up their management information and communication structure

A Third-Generation Prediction Market

This article theorizes a new way to predict firm performance based on aggregation of sensing among frontline employees about changes in operational capabilities to update strategic action plans. We frame the approach in the context of first- and second-generation prediction markets and outline its unique features as a third-generation prediction market. It is argued that frontline employees gain deep insights when they execute operational activities on an ongoing basis in the organization. The experiential learning from close interaction with internal and external stakeholders provides unique insights not otherwise available to senior management. We outline a methodology to agglomerate these insights in a performance barometer as an important source for problem finding and innovation

Exploring a New Indicator to Predict Financial Performance

This paper explores a new judgmental forecasting indicator, the Employee Sensed Operational Capabilities (ESOC). The purpose of the ESOC is to establish a practical prediction tool that can provide early signals about changes in financial performance by gauging frontline employees’ sensing of changes in the firm’s operational capabilities. We present the first stage of the development of ESOC by applying a formative measurement approach to test the index in relation to financial performance and against an organizational commitment scale. We use distributed lag models to test whether the ESOC can predict financial performance. Monthly data were collected from frontline employees in three different companies during an 18-month period, and the initial results indicate that the ESOChas predictive power

A New Approach to Strategic Control

Recent advances within the dynamic capabilities view emphasize the “sensing” of employees as an important part of the micro-foundations of dynamic capabilities: By putting in place organizational processes that mobilize and exploit information gathered by individual employees from their operating environment, firms can update insights about performance outcomes and improve strategic decision-making. We test empirically the extent to which firms can ascertain performance outcomes by drawing on employee knowledge. Our empirical setting is the Scandinavian hospitality sector with respondents among frontline service employees. Using a time series approach, we show that employee respondents (collectively) assess medium-term organizational performance better than management and the financial models available to them