Vol. 12(1), pp. 37-49, January-March 2020 DOI: 10.5897/JDAE2019.1125 Article Number: BCA4AE463300 ISSN 2006-9774 Copyright ©2020 Author(s) retain the copyright of this article http://www.academicjournals.org/JDAE Journal of Development and Agricultural Economics Full Length Research Paper Spatial price transmission between white maize grain markets in Mozambique and Malawi Helder Zavale* and Rafael da Cruz Macamo Department of Agricultural Economics and Development, Faculty of Agronomy and Forestry Engineering, Eduardo Mondlane University, Maputo, Mozambique. Received 15 October, 2019; Accepted 21 February, 2020 The objective of this study was to measure white maize grain price transmission among markets in Mozambique and Malawi. Our analysis included two major deficit markets (Maputo in Southern Mozambique and Blantyre in Southern Malawi) and two major surplus markets (Chimoio in Central Mozambique and Nampula in Northern Mozambique). We used monthly wholesale white maize grain prices covering the period 2000 through 2016 to test for and quantify the magnitude of short- and long- run price transmission. To do so, we employed a combination of methodological approaches: Johansen cointegration test, Granger causality test and error correction model (ECM). Our findings revealed that Chimoio market has joint long-run relationship with Maputo, Nampula and Blantyre markets. All three Mozambique market pairs (Maputo and Chimoio; Maputo and Nampula; and Chimoio and Nampula) exhibited bidirectional causality in the long run. However, price changes in Maputo, Chimoio and Nampula are transmitted to Blantyre, but not the reverse. In the short run, only two Mozambique market pairs (Maputo and Chimoio, and Chimoio and Nampula) show bidirectional causality. Blantyre appeared to not exhibit short-run causality with Maputo, Chimoio nor Nampula. Key words: Market integration, white maize grain, causality, price transmission INTRODUCTION Maize is among the most important commodities in terms of production and consumption in both Malawi and Mozambique. Data from the nationally representative Integrated Household Survey (IHS), administrated by the Malawi National Statistics Office (NSO) in 2016, administrated by the Malawi National Statistics Office (NSO), show that 70.8% of the 3.8 million households grew maize in the 2015/2016 agricultural season in Malawi. Similarly, data from the nationally representative Integrated Agricultural Survey (IAI), conducted by Mozambique Ministry of Agriculture and Food Security (MASA) in 2015, conducted by the Mozambique Ministry of Agriculture and Food Security (MASA), indicate that 67.2% of the about 4.0 million households grew the crop in the 2014/2015 agricultural season in Mozambique. These two nationally representative surveys also reveal that the shares of the total cultivated area accounted for by maize in each country averaged 56.2% in Malawi and *Corresponding author. Email: hzavale@gmail.com. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License