STRATEGIC DEFAULT IN THE INTERNATIONAL COFFEE MARKET

• 成果类型: Article
• 署名作者: Blouin, Arthur; Macchiavello, Rocco
• 署名单位: University of Toronto; University of London; London School Economics & Political Science
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjz004
• 发表日期: 2019
• 页码: 895-951
• 关键词: long-term-contracts; credit constraints; price adjustment; hold-up; TRADE; INFORMATION; FIRMS; state; MODEL

摘要

This article studies strategic default on forward sale contracts in the international coffee market. To test for strategic default, we construct contract-specific measures of unanticipated changes in market conditions by comparing spot prices at maturity with the relevant futures prices at the contracting date. Unanticipated rises in market prices increase defaults on fixed-price contracts but not on price-indexed ones. We isolate strategic default by focusing on unanticipated rises at the time of delivery after production decisions are sunk and suppliers have been paid. Estimates suggest that roughly half of the observed defaults are strategic. We model how strategic default introduces a trade-off between insurance and counterparty risk: relative to indexed contracts, fixed-price contracts insure against price swings but create incentives to default when market conditions change. A model calibration suggests that the possibility of strategic default causes 15.8% average losses in output, significant dispersion in the marginal product of capital, and sizable negative externalities on supplying farmers.