DB WK 8

Please read the following two Joint Ventures & Shipping Cost .  A substantive reply includes at least 100 words per topic analyzing the initial thread as well as adding to the research and concepts put forth in that thread.  The goal is to create meaningful discussion.

Source - Cross Border Commerce - 2nd edition ISBN13: 978-1934748121

Key Term- Joint VenturesTop of Form

Definition: 

When two or more business join to start or further a project it is called a Joint Venture.

Summary:

Japan is set to welcome a new joint venture between WeWork and SoftBank, to offer consulting services as well as work areas in a co-working environment.  The company was able to raise $760 million to use on this venture.  There are plans for SoftBank to invest even more in the venture in the future.  Each company will have 50% ownership in the company giving them equal rights.  The new company plans to open in 2018 with the belief, “At WeWork, we want to create a world where people work to make a life, not just a living” (Mclain, 2017)

Discussion:

There are many advantages for this new joint venture between WeWork and SoftBank.  With both companies having 50% ownership, they both take own the risk and benefits of the new company, it will cut down on cost for each company and helps form alliances.  The disadvantages to establishing a company in Japan they could face is legal and cultural differences and they could lose some control of the company they own.

References:

Sean Mclain (8 Aug. 2017.). Nissan to Sell Stake in Battery Joint Venture to China’s GSR. WSJ. Retrieved August 16, 2017, from https://www.wsj.com/articles/nissan-to-sell-stake-in-battery-joint-venture-to-chinas-gsr-1502196278 

Hook, L. (2017, July 18). SoftBank and WeWork launch joint venture in Japan. Retrieved August 16, 2017, from https://www.ft.com/content/592ff362-6bc4-36df-9640-8b181162a310

Mogato, M. (2017, July 25). China Backs Joint Energy Development with Philippines in Disputed Sea. Retrieved August 16, 2017, from https://www.usnews.com/news/world/articles/2017-07-25/china-backs-joint-energy-development-with-philippines-in-disputed-seaTop of Form

Key Term: Shipping Costs

Shipping costs are those costs associated with bring a good to and from another country or place?

Review of Article:

Moyle, B. (2014). The raw and the carved: Shipping costs and ivory smuggling. Ecological Economics, 107, 259-265. doi:10.1016/j.ecolecon.2014.09.001

                The article starts by talking about the increase of the poaching of ivory. There has been an increase in poaching of African elephant’s raw ivory, which can be seen by the increased amounts of elephants being found dead and the amount of ivory being seized (Moyle, 2014). The article continues on to try and find out why there has been an increase of seizures and poaching. It gives a few explanations as to why these events could be occurring. The article then talks about how transportation costs and shipping costs and how they are influencing how the ivory is being smuggled (Moyle, 2014). Moyle gives two examples of how shipping costs can influence the smuggling of ivory. The first is through arbitrage and the second is in stockpiling the ivory (Moyle, 2014).  Finally, the article talks about how the data was obtained and results of the data.

Discussion

                Shipping cost are those costs that it takes to transport a product from one country or place to another. In the article “The raw and the carved: Shipping costs and ivory smuggling”, by Brendan Moyle, the author shows how the impact of shipping costs have on the way that ivory is smuggled. “If shipping costs are examined a relationship to seizure rates is indicated. The period 2003–5 had high shipping costs and low seizure rates. Shipping costs collapsed after the 2008 Global Financial Crisis (GFC) and interdictions of containers surged” (Moyle, 2014, para. 9). With the rise of shipping costs, it seemed like there were less containers being shipped that had the smuggled ivory in them and with the shipping costs being lower the smugglers were able to make more of a profit. “Shipping costs provide two potential explanations for the increase in poaching. One is the arbitrage explanation. Arbitrage is the process of buying goods at a low price in one market to sell at a higher price in another market. The arbitrage profit of this is the difference in the prices less the transaction costs, which include the transport-cost of the trade” (Moyle, 2014, para. 10). So, when the shipping costs were high there was less of a profit to be made. “A second explanation is that ivory is being stockpiled as an investment. Ivory can be stored at a negligible cost. If humidity levels are optimal it can be stored for years” (Moyle, 2014, para. 12). The idea is that ivory can be held to try and make even more of a profit, because the smugglers are hoping the demand for the ivory will rise with there being less of a supply. “In the case of ivory, shipping costs appear to be a significant part of these costs. This is a consequence of the distance between markets in Asia from sources in Africa and ivory's bulk. Ivory is unusual amongst smuggled illegal wildlife products by being dominated by traffic in shipping containers. The results here indicate that this segment of the trade has significant costs to smugglers and they are sensitive to it (Moyle, 2014, para. 51). When the smugglers incur higher shipping costs it seems like they are less likely to try and get ivory because it causes to much of a loss for them.

Reference

Moyle, B. (2014). The raw and the carved: Shipping costs and ivory smuggling. Ecological Economics, 107, 259-265. doi:10.1016/j.ecolecon.2014.09.001

Gallagher, R. M. (2013). shipping costs, information costs, and the sources of industrial coagglomeration. Journal of Regional Science, 53(2), 304-331. doi:10.1111/jors.12002

Pandian, P. (2016). Solving transportation problems with mixed constraints based on unit shipping cost. Research Journal of Pharmacy and Technology, 9(12), 2377. doi:10.5958/0974-360X.2016.00476.5