Markets Integration of Orange-Spotted-Grouper Fresh Fish in the Kingdom of Saudi Arabia

(Mutasim Mekki M. Elrasheed, Abdulaziz Mohamed Alshuabi, Abda AbdAlla Emam, and Mohamed Almaili)

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Abstract

Achieving self-sufficiency from fishery sector in the Kingdom of Saudi Arabia requires conducting studies in the field of fresh-fish markets efficiency and integration, as it plays a fundamental role in directing the decisions of both investors and consumers towards developing this sector. This necessitates the conductance of this study which aimed to analyze the fresh orange-spotted-grouper fish markets’ efficiency and spatial integration in selected retail-markets from eastern (Dammam and Hofuf) and central (Riyadh and Burridah) regions of Saudi Arabia. In addition to, it aimed to determine the mechanism of spatial price transmission between the selected markets. Augmented Dickey Fuller Test (ADF), Johansen tests, Vector Auto-regression (VAR) model, and Granger-Causality Procedures were used to achieve the stated objectives. Results of Johansen tests revealed the inexistence of long run spatial integration between the selected markets, which means the presence of a high degree of monopoly and poor disseminations of sound information. On the other hand, VAR results revealed the presence of one way (unidirectional) relationships for a limited numbers of markets (31%), indicating the weaknesses of price efficiency to direct Orange-Spotted-Grouper fresh fish retail markets towards equilibrium in the short–run. The Granger Causality procedures revealed the dominance of Buraidah fresh orange-spotted-grouper fish retailmarket in determining the price for the selected markets in the study. The study stressed the importance of gathering and disseminations of sound information on retail markets prices in Saudi Arabia, setting an encouraging policies, and provision of support for the investors to join the field of orange-spotted-grouper fish investment and marketing. Key Words: Johansen Test, Law of One Price, Markets Efficiency, Spatial Market Equilibrium, Vector Autoregressive Model,
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