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Abstract

Vol. 63, No. 3, pp. 209-226 (2012)

“Improvement of Transportation Infrastructure and Integration of Agricultural Market —An Analysis of Rice Market in Madagascar—”
Hajime Miyake (Sharp Corporation), Takeshi Sakurai (Institute of Economic Research, Hitotsubashi University)

This paper examines spatial integration of rice market in Madagascar, one of the sub-Saharan African countries whose road conditions are among the worst. Using weekly data of milled price collected in 6 major consumer markets, the analyses find that the construction of new roads in the northern part of the country reduced transportation cost between markets but it did not increase, or rather decreased the speed of price adjustment. We conclude that the improvement of infrastructure itself does not necessarily enhance the degree of spatial market integration if market structure does not allow it, for example in the case of oligopoly.