Assessment of Level of Market Integration in Indian Cotton Markets

Narayanaswamy Mamatha, K. M. Shivakumar, A. Vidhyavathi and D. Murugananthi

Asian Journal of Agricultural Extension, Economics & Sociology, 2022, vol. 40, issue 10, 5

Abstract: The current study is aimed at using co-integration in assessing the level of market integration among selected cotton markets in India. Monthly cotton price data were collected for the period 2008-09 and 2016-17 from the AGMARKNET website. The advanced time series econometric tools like Augmented Dickey-Fuller (ADF) test, Johansen co-integration test and Granger Causality test were used to study market integration using E-Views software. The price series for cotton in selected markets were subjected to the consequences of unit root and were stationary at first difference. The long-run equilibrium relationship among the cotton markets indicated that these markets were integrated with each other. This implied that prices in Indian cotton markets tend together in response to changes in the demand and supply of cotton. Granger Causality test revealed that the Salem market was the lead cotton market because it influenced the prices of Kurnool and Warangal cotton markets.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2022
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