Supply producer hedging

Affected by the price/outlook supply for NG, as well as portfolio diversification requirements (such as asset hedging against volatility issues among power producers)... 

Because of low costs in component manufacturing and assembly, most companies prefer to locate these two major processes in the EE. However, to hedge against supply side risk, they may choose to import some of the components from ME at higher cost (Blanco 2009). By assembling the imported components in EE and exporting the finished products to the ME, the manufacturer can take advantage of economic incentives such as the duty-drawback and local-content rules in EE. On the other hand, if the company chooses to use locally produced... 

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