| Abstract: | This paper presents a research result on impact of modern information and
communication technology on increasing the level of integration among spatially
separated sample maize markets in Ethiopia. A total of 14 markets, including Addis
Ababa central market, were selected from various parts of the country and monthly
retail price data were collected beginning from January 2003 to December 2014
and partitioned into ‘before’ and ‘after’ ICT periods. A threshold autoregressive
(TAR) model in the form of error correction method is used to analyze the data and
the result shows that the overall integration between Addis Ababa and the
respective regional markets has increased after ICT period.
Regarding the deficit and surplus areas, the level of integration among markets is
higher in surplus areas than in deficit areas before ICT period. However, after the
ICT period, the level of integration was not determined by the amount of
production. This is indicated by speed of adjustment of the error correcting terms
which shows, in the ‘before’ period the deviation from the equilibrium was not
adjusted immediately in deficit markets than the surplus markets, both in the above
and below the threshold level but in the ‘after’ period, the speed of adjustment is
improved in both types of markets. The study proposes that coordinated
infrastructure development is required through government intervention as
communication alone does not bring the required result and expansion of modern
commodity exchanges is highly recommended to increase grain market integration. |
