Market integration and market leadership: Evidence for cyprinoid markets in China

Cyprinoids are important for food security in China, and information about the degree of integration of the markets for cyprinoids is valuable to Chinese policy makers in their attempt to regulate the fisheries and aquaculture industry. This study investigates horizontal and vertical market integration of three species of carps (grass, common and silver) at two stages of the value chain (ex-farm and retail). The study implements a VectorError-Correction model, and it uses monthly data ranging from 2015 to 2019. The study shows that with the exception of the markets for common and grass carps at the retail stage, markets are, at best, partially integrated. Horizontally, only the common and the grass carps show significant price transmission. At both value chain stages, the price relationship is bidirectional, and no clear-cut market leadership exists. Vertically, the price relationship is also bidirectional for the common and the grass carp, but the silver carp shows no significant market integration across the value chain.