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Measuring Market Integration in Mozambican Maize Markets: A Threshold Vector Error Correction Approach


  • Alemu, Zerihun Gudeta
  • Biacuana, G.R.


The primary objective of this research was to measure the extent of market integration between major surplus and deficit maize markets in Mozambique namely, Chimoio-Maputo, Chimoio-Beira, Ribaue-Nampula, and Mocuba-Nampula. To achieve this objective, Threshold Vector Autoregressive models were applied. The choice of the model was motivated by unobservable transaction costs and the import ant influence that their presence may exert on equilibrium spatial price relationships. The following are some of the major findings of the study. Firstly, threshold values (i.e. estimates of transaction costs) are found to be correlated positively with distance and inversely with the condition of the roads connecting markets. Secondly, market integration analysis revealed that out of the four surplus and deficit market combinations studied, Chimoio- Maputo and Mocuba-Nampula market pairs are integrated. However, the degree of integration was found to be the strongest in the former. Finally, results from the impulse response suggested that deficit/surplus markets, in the integrated market combinations, are relatively more responsive to shocks emanating from surplus/deficit markets.

Suggested Citation

  • Alemu, Zerihun Gudeta & Biacuana, G.R., 2006. "Measuring Market Integration in Mozambican Maize Markets: A Threshold Vector Error Correction Approach," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25657, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25657

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    References listed on IDEAS

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    9. Philippe Martin, 1997. "Convergence et politiques régionales en Europe," La Lettre du CEPII, CEPII research center, issue 159.
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    Cited by:

    1. Mayaka, Venny K., 2013. "An Assessment Of Dry Beans Market Integration In Selected Markets In Kenya," Research Theses 157599, Collaborative Masters Program in Agricultural and Applied Economics.

    More about this item


    Mozambique; market integration; maize market; transaction cost; threshold vector error correction; Crop Production/Industries; Marketing; C21; C22; D4; E3; Q13;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness


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