scholarly journals Spatial Market Integration: Definition, Theory, and Evidence

1996 ◽  
Vol 25 (1) ◽  
pp. 1-11 ◽  
Author(s):  
Kevin McNew
Keyword(s):  
Mississippi River ◽  
Market Integration ◽  
Linear Models ◽  
Transport Costs ◽  
Interregional Trade ◽  
Space Model ◽  
Point Space ◽  
Spatial Price ◽  
Price Analysis ◽  
Price Relationships

A point-space model of interregional trade is used to define market integration and to explore its implications for modeling spatial price relationships. This analysis indicates that spatial prices are related nonlinearly, contrary to much of the work on spatial price analysis which uses linear models. As an empirical example, corn market integration along the Mississippi River is examined during the Midwest flood of 1993. Higher transport costs during this period significantly reduced the extent of integration and thereby decreased excess demand shock transference across regions.

Market Integration and Spatial Price Transmission in Niger Grain Markets

2014 ◽  
Vol 26 (2) ◽  
pp. 264-273 ◽  
Author(s):  
Seydou Zakari ◽  
Liu Ying ◽  
Baohui Song
Keyword(s):  
Market Integration ◽  
Price Transmission ◽  
Grain Markets ◽  
Spatial Price

Can Price Dispersion Reveal Distance-Related Trade Costs? Evidence from the United States

2013 ◽  
Vol 13 (2) ◽  
pp. 151-173 ◽  
Author(s):  
Michael A. Anderson ◽  
Kurt C. Schaefer ◽  
Stephen L. S. Smith
Keyword(s):  
United States ◽  
Market Integration ◽  
Price Dispersion ◽  
The United States ◽  
Trade Costs ◽  
Currency Unions ◽  
States Data ◽  
Dispersion Measures ◽  
Spatial Price ◽  
Related Trade

We offer insights on how distance-related trade costs may best be inferred from price-dispersion measures. Using a simple spatial model of price dispersion, we argue that measures of price dispersion that are not spatially informed can mislead researchers into concluding that distance-related costs are small even when such costs are the major determinant of price dispersion. With intra-United States data on eleven goods, we find that distance-related costs are large and are indeed underestimated when inferred from standard, non-spatial, price dispersion measures. Our empirical findings have implications for studies of market integration policies (such as trade liberalization and currency unions) and the significance of economic geography.

scholarly journals Market integration and price transmission in Ethiopian banana supply chain

2020 ◽  
Author(s):  
Zewdie Habte Shikur
Keyword(s):  
Supply Chain ◽  
Granger Causality ◽  
Market Integration ◽  
Geographic Distance ◽  
Price Transmission ◽  
Transport Costs ◽  
Wholesale Market ◽  
Market Prices ◽  
Long Run ◽  
Banana Market

Abstract Local banana market prices in surplus areas are asymmetrically integrated and transmitted with that in central banana market prices or deficit areas due to geographic distance between markets, market power, and high transportation costs. As the result, the banana marketing margin is high due to high transport costs and transaction costs. Although the policy relevance of degree of vertical and spatial price transmission in banana supply chain, in Ethiopia is largely unknown, and this study assists to bridge the existing gap. The study investigates degree of spatial and vertical market integration and price transmission of banana supply chain in Ethiopia. ARDL co-integration bound tests and Granger causality tests are employed to examine vertical and horizontal price transmissions in banana supply chain using 10 years average monthly banana prices. The study finds relatively a higher degree of price transmission from central wholesale banana market to surplus banana market. Central wholesaler price has a significant effect on both banana producer and retailer prices in both long-run and short‐run. The result indicates that Granger causality is running from central wholesale market to local markets. There may be high transaction cost may reflect the vertical and spatial asymmetric price transmissions in banana supply chain. Policy interventions in banana supply chains could facilitate a faster and substantial degree of price transmission between actors in banana supply chain.

scholarly journals Adoption of yield-increasing technologies in poorly integrated crop output markets

2021 ◽  
Vol 10 (3) ◽  
pp. 319-330
Author(s):  
Relwende Apollinaire Nikiema
Keyword(s):  
Developing Countries ◽  
Burkina Faso ◽  
Market Integration ◽  
Large Scale ◽  
Price Dispersion ◽  
Price Volatility ◽  
Market Development ◽  
Output Market ◽  
Spatial Price ◽  
The Relationship

This paper analyzes the relationship between crop output market and the use of modern inputs of farmers in developing countries. For this purpose, we used a large-scale household dataset collected in rural Burkina Faso. We found evidence that crop output market integration matters in farmer decision to adopt modern inputs. More specifically, an increase of the spatial price dispersion by 10% is significantly associated with a decrease of the probability of using modern inputs by 4%. However, price volatility affects neither the decision to use of the modern nor the intensity of adoption. Our finding implies that in order to succeed, agricultural interventions that target the adoption of modern inputs should be accompanied with market development measures.

scholarly journals Analysis of Transport Infrastructure Development and Competitiveness in the Member Countries of Pacific Alliance (2007-2016)

2020 ◽  
Vol 11 (2) ◽  
pp. 277-297
Author(s):  
Raul Alberto Cortes-Villafradez ◽  
Nicolas De la Peña-Cárdenas
Keyword(s):  
Market Integration ◽  
Distance Effect ◽  
Transport Infrastructure ◽  
Infrastructure Development ◽  
Trade Integration ◽  
Transport Costs ◽  
Global Competitiveness ◽  
The Pacific ◽  
Infrastructure Investments ◽  
Weak Trend

The development of transport infrastructure is a key element for increasing competitiveness, as it reduces the distance effect and freight transport costs, allowing the generation of efficiencies in market integration. This descriptive study uses a comparative methodology, taking as variables the indicators of global competitiveness of the member countries of the Pacific Alliance during the period 2007-2016. The analysis of the results shows a weak trend in the infrastructure development of the Pacific Alliance group and a notable asymmetry among the member countries. There is a need for an individual strategy in each country that is in line with the objectives of trade integration in Asia. Another finding suggests that the achievement of better indicators depends on other significant variables and on the way in which the costs of transport infrastructure investments are passed on to agents who move freight.

scholarly journals Transport Costs and the Geography of Arbitrage in Eighteenth-Century China

2002 ◽  
Vol 92 (5) ◽  
pp. 1406-1419 ◽  
Author(s):  
Carol H Shiue
Keyword(s):  
Eighteenth Century ◽  
Growth And Development ◽  
Market Integration ◽  
Western World ◽  
Subsequent Growth ◽  
Transport Costs ◽  
Data Set

Trade has been considered a condition for growth and development, a view that might have merits in explaining the rise of the Western world. I use a new data set from archival sources of eighteenth-century China to revisit this question. This analysis suggests previous studies of market integration, which attribute much growth to a reduction in transport costs, have overestimated these effects. I find the overall level of market integration in China was higher than previously thought, and, intertemporal effects are important substitutes for trade. Both factors reduce the importance of trade as a unique explanation for subsequent growth.

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