Analysis of Effectiveness of Modern Information and Communication Technologies on Maize Marketing Efficiency in Lilongwe and Dedza Districts and Selected Markets of Malawi

Government of Malawi has been promoting initiatives like Malawi Agriculture Commodity Exchange (MACE) that aim at reducing information asymmetry among market players especially smallholder farmers. Using co-integration error correction models, the study assessed effectiveness of modern ICT based market interventions on improving maize marketing efficiency in Malawi. Considering that efficient markets are integrated markets when price difference is only a factor of transaction costs, TAR models assessed price transmission speed in pre – ICT and post – ICT periods. Using logit model, the study further identified socioeconomic factors influencing use of modern ICTs among smallholder farmers. Of the sampled households, only 18 percent used modern ICTs because of high initial capital cost, illiteracy and lack of awareness on the modern ICTs. Based on the logit model results, the significant socioeconomic factors that highly influenced use of modern ICTs were physical asset wealth and gender of the household head. The spatial integration results show that markets in Malawi were integrating. The results of TAR models in pre – ICT and post – ICT periods show that ICT based market interventions have positively influenced market integration and price transmission. Thus, modern ICTs have contributed to the reduction of search transaction costs leading to improved marketing efficiency. Based on the results, the study recommends the need to increase awareness on ICT based market interventions to all gender groups and to improve market infrastructure in the country.

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 Record created 2017-04-01, last modified 2018-01-22

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