Article Sidebar
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
NAJ supports free online communication and exchange of knowledge as the most effective way of ensuring that the fruits of research and development practice are made widely available. It is therefore committed to open access, which, for authors, enables the widest possible dissemination of their findings and, for readers, increases their ability to discover pertinent information. The Journal adopts and uses the CC: BY license and is open access. This license lets others distribute, remix, adapt, and build upon your work, even commercially, as long as they credit you for the original creation. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the Journal’s published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work. Copyright for articles published in this Journal is retained by the Journal.
Main Article Content
Effect of Transaction Costs on Market Integration of Cowpea between Gombe and Abia, Imo and Enugu State, Nigeria
Abstract
In recent times studies on market integration have been able to prove the performance of the marketing system; indicating its efficiency or its inefficiency. But in most cases, the role transaction cost plays in the integration of the market is always ignored, focusing on the degree of integration only. In order to bring to mind the effect of transaction cost on the level of integration of the market, the study analyzed the effect of transaction cost on market integration. It made use of secondary data on cowpea monthly prices obtained from the National Bureau of Statistics (NBS) (2016-2018). It aimed at looking at the effect of transaction cost on market integration in the study area. It used the Threshold Autoregressive error correction model (TAR) to realize the objective. It ascertained that transaction cost has an effect on market integration. This effect was proven by the market asymmetry of prices between the source and destination market prices of cowpea; with the threshold value of 0.983, 0.861 and 1.087 respective for Abia, Imo and Enugu States. There was evidence of nonlinearity in the error correction and long-run asymmetry (asymmetry in the speed of adjustment) and well distribution of observation in the `IN` regime (30.8, 42.3 and 38.5 percent) respectively and the OUT regime (69.2, 57.7 and 61.5 percent) respectively for Abia, Imo and Enugu State. Therefore, the transaction cost is responsible for the price asymmetry. The study, therefore, recommends that policies that improve infrastructural development, communication hub and facilities should be encouraged to reduce the effect of transaction costs on market integration.
