Determinants Of Market Efficiency Of Commodity Exchange The Case Of Ethiopian Commodity Exchange

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Addis Ababa University


The objective this study is to examine the determinants of market efficiency of Ethiopian Commodity Exchange (ECX) that the market institution (ECX) promised and work toward achieving market efficiency. Of course, it is after eleven years of establishment that this research was conducted to analyze the operation of ECX and find out the fulfillment of the promised ‘making an efficient market work for everybody’. The variable that used to examine were Trading Platform, Trade Contracts, Counterparty Risk Management, Brokers Market Participation, Product Integrity, Viable Regulation and Enforcement that the data was analyzed through descriptive analysis and binary regression model using SPSS version 20. The research methodology is descriptive and explanatory designs and used multiple linear regression analysis to examine the relationship between dependent and independent variables. Correlation analysis is useful to measure linear association relationship between variables with the intention their coefficient indicates the strength of linear association between two variables. The finding indicates that these six independent variables are found to have a positive correlation with market efficiency that revealed from the Pearson's Correlation Coefficient. The coefficients of the variables indicated that these variables have different magnitudes of correlation with each other too. As the finding reveals, product integrity and viable regulatory and enforcement have the highest and strong positive relation where as trading platform relatively recorded moderate



Trading Platform, Trade Contracts, Counterparty Risk Management