Argument: Dollarization can increase competition, innovation, productivity

Support

• Meredith Blumthal& Hamish Gow, “Supply Chain Innovations in the Ecuadorian Cut Flower Industry “Agricultural & Consumer Economics,University of Illinois Urbana-Champaign“Dollarization has forced firms to focus not only on productivity gaps but also explore opportunity gaps.Believe that without the arbitrage removal wouldn’t see these types of market innovations.The example of

Entrepreneur : Enrique Hidrobo

–Medical Doctor

–Experimented with many domestic crops

–Only export cut flowers turned a profit In 1996 Started rose farm

–With the $$ he realized the importance of new market opportunities

–Idea : Create a firm to sell directly to the retail florist

Brokerage firm selling flowers directly to Florists

–Collectively owned by the growers

Product

–Quality roses shipped in quantities of 175-100 stems

Pricing

–Standard channel –double marginalization

–Their channel –toll fee & stable year round prices

Once business model proven other joined

–Equity membership fee