Analysis of Determinants of the Use of Online Trading on the Ethiopian Commodity Exchange Perceived Operational Practice
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Date
2016-06
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Addis Ababa University
Abstract
The objective of this study was toanalyse the determinants of the use of the online trading on ECX perceived
operational practice. ECX had learnt that the capacity of that the existing central trading floor restricts the
direct participation of large number of market actors located at the remote parts of the country and this
resulted in- high transaction costs that prohibit to some actors, more volatile prices, and higher risk of
market collusion. The existing open outcry trading system at the headquarters also restricts the market
expansion potential of the ECX and lack of efficiency and effectiveness of the day to day ECX operation.
Having noted the weak side of the existing system, ECX has implemented an integrated online trading
system that has been believed to improve the level of overall ECX perceived operational practice. This
study used case study method due to its convenience and economic of use. The study was included 112
respondents of which composed of 86 Male and 26 Female.Structured self-administered questionnaires
used to collect data from participants and Nominal data and ordinal data were collected and analysed.
Descriptive analysis, Correlation and standard multiple regression analysis were used to analyze data and
examine the relationship. The correlation analysis illustrated statistically significant Strong Positive
relation between E-trading (as measured by the Trust, Attitude, Perceived benefit and perceived risk) and
ECX perceived operation practice (as measured by constructs of price discovery scale, market expansion
scale, access to market scale , avoidance of collusion scale and ECX Operation scale).A standard multiple
regression were carried out to examine the prediction extent of four predictors of the Online trading
(Perceived benefit, Perceived ease of use, Trust and Attitude) on ECX operational variables and the result
showed that Among the four variables, Perceived Benefit (Beta=.256, P<.05), Trust (Beta=.298; P<.05)
and Attitude (Beta=.252; P<.05) are making statistically significant unique contribution to explaining the
ECX perceived operational practice, when the variance explained by all other variables in the model is
controlled for.The model was a good fit for the data (F=25.885, p<.0005). In conclusion, the correlation
analysis proved Direct strong positive correlation between the online trading constructs and ECX
perceived operational practice and the Regression analysis predicted the extent that the adaption of online
trading has significant effect on ECX operational practices.This study confirmed empirically that the
adaption of online trading has an impact on ECX operational practice and hence, it is recommended to
expand the existing platform to regional level by constructing remote training center that are equipped with
online trade platform so that all stakeholders can access the platform and as many products as possible to
be exchanged via the exchange.
Key words: Ethiopia Commodity Exchange, Market Expansion, Online Trading,
Organizational Performance, Price Discovery
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Keywords
Ethiopia commodity exchange, Market expansion, Online trading, Organizational Performance, Price discovery