Efficiency of Selected Sudanese Cattle Markets: A Bivariate Cointegration Approach (1995-2011)Mohammed OA Bushara1* and Murtada KA Abdelmahmod2
- *Corresponding Author:
- Mohammed OA Bushara
Department of Agricultural Economics
University of Gezira, Wad Medani, Sudan
Tel: (+249)511 - 841623
E-mail: [email protected]
Received date January 04, 2016; Accepted date January 27, 2016; Published date January 30, 2016
Citation:Bushara MOA, Abdelmahmod MKA (2016) Efficiency of Selected Sudanese Cattle Markets: A Bivariate Cointegration Approach (1995-2011). Int J Econ Manag Sci 5:321. doi:10.4172/2162-6359.1000321
Copyright: © 2016 Bushara MOA, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
The importance of the livestock trade to the national economy of Sudan is significant; however, Sudan was adversely affected by the global crisis through a decline in oil and other external receipts. The main objectives of this study is to investigates price movements among important livestock markets in the Sudan to explore their performance and pricing efficiency. The stationarity of data tested using the unit root test and then market integration was tested using bivariate cointegration analysis. The study found strong evidence of cointegration of pairs of markets. The error correction mechanism adjusts significantly to shocks to its equilibrium relationship. The estimated coefficients for ECM were fluctuated between 4% and 24% and significant at 1% level, suggesting slowing adjustment towards the long-run equilibrium. This implies that any shock that forces prices from their long-run value would take a long time for prices to return to their equilibrium, although the speed of adjustment was highest in case of Omdurman on Nyala and lowest in case of Nyala on Elobied, this might be due to supply and demand relation between Nyala and Omdurman in sense that Nyala and Elobied were supply markets. The recent paved roads that linked between the markets might accelerate and facilitated the movement between these markets, in addition to a huge capital that allocated to livestock business recently.