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Article
Publication date: 19 September 2019

Wenchao Wu, Hsiaoping Chien, Takeshi Sakurai and Satoru Muranaka

The purpose of this paper is to examine the asymmetry of vertical price transmission (i.e. from the wholesale to the retail market) in the Nigerian cowpea market and identify its…

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Abstract

Purpose

The purpose of this paper is to examine the asymmetry of vertical price transmission (i.e. from the wholesale to the retail market) in the Nigerian cowpea market and identify its causes.

Design/methodology/approach

The authors surveyed 19 markets in Kano and Ibadan from 2012 to 2015. The autoregressive distributed lag model and asymmetric error correction model were adopted to test the asymmetry of vertical price transmission.

Findings

Results suggest that price transmission in Kano is symmetric, but it is asymmetric in Ibadan. This distinction is caused by the differences in the market structure (in terms of competition level, inventory period and transaction cost) of these cities.

Originality/value

This is the first study to empirically investigate the vertical price transmission in two Nigerian cowpea markets. It is also the first to reveal the role of the market structure in price transmission through a comparison of two markets. The findings provide policy implications and will help create a more efficient food market in Nigeria.

Details

British Food Journal, vol. 121 no. 11
Type: Research Article
ISSN: 0007-070X

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