Digital Liquidity and Market Segmentation in Agricultural Value Chains: Network Reach and Trader-Level Price Dispersion in Bangladesh

Tanvir Ahmed; Nure Jannat Arpa

doi:10.24925/turjaf.v14i9.2579-2591.8955

Authors

Tanvir Ahmed Faculty of Agricultural Economics and Agribusiness Studies, Khulna Agricultural University, Khulna-9100, Bangladesh https://orcid.org/0009-0009-5827-6230
Nure Jannat Arpa Faculty of Agricultural Economics and Agribusiness Studies, Khulna Agricultural University, Khulna-9100, Bangladesh https://orcid.org/0009-0003-4183-0529

DOI:

https://doi.org/10.24925/turjaf.v14i9.2579-2591.8955

Keywords:

Digital Liquidity , Market Segmentation, Price Dispersion , Network Reach , Agricultural Value Chains

Abstract

Digital financial services (DFS) are widely presumed to reduce transaction and information frictions and thereby promote market integration in agricultural value chains. However, where exchange is network-embedded and access to differentiated trading tiers depends on reputation, compliance capacity, and rapid verifiable settlement, digitalization may instead be associated with wider within-chain price dispersion. This study examines whether digital liquidity is associated with wider trader-level price dispersion through its interaction with network position. We distinguish digital access (readiness) from digital transaction intensity, measured as the average share of procurement and sales settled digitally. Using the IFPRI enterprise dataset released in 2024, based on survey data collected during June–August 2023 in Bogra and Rangpur districts of Bangladesh through network-based recruitment, we construct selling- and procurement-side price dispersion as the winsorized log difference between each trader’s highest and lowest transaction prices. Network position is measured by network reach and diversification-based centrality (1–HHI). OLS estimates with trader-level controls and fixed effects show that digital intensity and network reach are positively associated with price dispersion, and that their interaction is also positive and statistically significant especially in the potato value chain, while the association is not robust in rice.

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