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Market integration of the Malaysian poultry industry: a bound testing approach to co-integration


Muazu, Abdulrazak Umar and Mohamed, Zainal Abidin and Shamsudin, Mad Nasir and Abd. Latif, Ismail (2013) Market integration of the Malaysian poultry industry: a bound testing approach to co-integration. International Journal of Agricultural Sciences and Veterinary Medicine, 1 (3). pp. 47-58. ISSN 2320-3730


This paper examines market integration by analyzing transmission of price among spatially separated regional wholesale poultry markets in Peninsular Malaysia. Short-run and long-run relationship of wholesale price among regional markets was examined using bound testing approach to co-integration and error correction models. The statistics follows the procedure of Wald or F-statistics in a generalized Dickey-Fuller regression, which is used to test the significance of lagged levels of the variables in a conditional unrestricted Equilibrium Correction Model (ECM). Based on Wald or F-test results of the jointly lag wholesale regional market prices, there exist co-integration among the price series. The value of the F-statistics (4.176) is greater than the upper bound critical values (3.67) at 5% significance level and also significant. Therefore, a long-run equilibrium relationship was found to exist between the regional markets. Results of the pair-wise Granger-causality between regional wholesale markets indicate bidirectional causality between central as terminal market and East-coast market. There is unidirectional South region Granger-cause central wholesale market price like-wise North region market Granger-cause Central market but not on the other direction.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Agriculture
Publisher: Meghana Publications
Keywords: Malaysia; Poultry; Market; Co-integration; Autoregressive
Depositing User: Nurul Ainie Mokhtar
Date Deposited: 13 Jul 2016 02:10
Last Modified: 13 Jul 2016 02:10
URI: http://psasir.upm.edu.my/id/eprint/29357
Statistic Details: View Download Statistic

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