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

Developing countries have been promoting initiatives that aim at reducing information asymmetry among market players especially smallholder farmers. Using co-integration error correction models, the study assessed effectiveness of modern Information and Communication Technologies (ICT) based market interventions in improving maize market efficiency in Malawi. Considering that efficient markets are integrated markets when price difference is only a factor of transaction costs, Threshold Autoregressive Error Correction (TAR) model assessed price transmission speed in pre – ICT and post – ICT periods in order to analyse effectiveness of modern ICTs. The spatial integration result shows that markets in Malawi were integrating. The results of TAR models in pre and post ICT periods shows 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 maize marketing efficiency. Based on the results, the study recommends the need to increase awareness of ICT based market interventions to all gender groups and improve market infrastructure in the country.