Using a generalized error correction model, this article measures and compares market integration for export cash crops versus imported food crops for Mali and Nicaragua, and computes transmission elasticities between changes in the goods' border and domestic prices. Both Mali and Nicaragua obtain the bulk of their export revenue from a particular agricultural commodity-cotton for Mali and coffee for Nicaragua-and both import the same key staple food of rice. To reap the economic gains from this trade specialization, the two countries' agriculture must be well-integrated into world markets. The two countries present an important policy contrast that affects their degree of world market integration and price transmission. In Mali, a parastatal enterprise controls its cotton industry, while Nicaragua has less state direction over agriculture. Reflecting this difference, the results show that for both its main export and import commodity, Nicaragua is more integrated into world markets and has higher price transmission than Mali. The results for Nicaragua also show much higher integration and price transmission for its main agricultural export (coffee) than its major import (rice).JEL classifications: D40, F15, Q11, Q17

A declining trend in the prices of vanilla beans reduce export earnings of developing country exporters. At the same time, currencies for these developing countries have depreciated. The‘new’ trade theories suggest that market structure plays an important role in relating exchange rate devaluations to price declines. This paper investigates the market structure and estimates the impact of exchange rate movements on prices for vanilla beans imported by the USA from five producers of vanilla beans in developing countries. Unlike other studies, the estimation is based on a‘fixed‐effects’ econometric model derived from the importer's profit equation and the‘Pricing to Market’ (PTM) hypothesis. Data are a pooled cross‐section and time series covering the period “1967”. The results reveal some evidence that US importers of vanilla beans have the market power to apply price discrimination and to adjust import prices in reaction to exchange rate movement vis‐à‐vis exporters.

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