As the worldâs third-largest cocoa beans producer, Indonesia is expected to have a comparative advantage and to become cocoa beans price reference. This research investigates market power of Indonesia cocoa beans export for the United State market as an impact of an export tax. Five cocoa beans exporting countries namely Cote dâIvoire, Ecuador, Ghana, Dominica Rep and Nigeria are calculated their market power as Indonesiaâs competitors by estimating residual demand elasticity with two stage least square method. The results show that Indonesiaâs market power suffered after imposing the export tax. Cote dâIvoire and Ghana get advantages from this export restriction. The effect of export tax on welfare is analyzed by calculating terms of trade. The gain from cocoa beans trade depicts a declining terms of trade for dealing with the international cocoa beans market.
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