Wholesale Markets as Governance Entities: Institutional Coordination of Trader Marketing in Nigerian Agri‐Food Markets

ABSTRACT Coordinated marketing activities can be an important mechanism for negotiating prices and reducing transaction and transportation costs in food supply chains. Yet there are few studies on the prevalence and drivers of the choice of undertaking coordinated marketing by food wholesale markets. Existing research has focused largely on coordination among firms or governance within farmer cooperatives, leaving a gap in understanding why wholesale markets choose to coordinate trading activities on behalf of their member traders. We address this gap by examining the extent and drivers of institutional coordination for trader sales and purchases by wholesale market leaders across diverse product and market contexts in Nigeria. Using primary data from approximately 470 product leadership committees in a census of 299 wholesale markets across eight states in Nigeria, we combine descriptive analysis with probit regression models. Three key findings emerge. First, coordination is considerably more common for highly perishable products such as tomatoes and green leafy vegetables than for fish. Second, competition tends to prevail over coordination in major consumption areas. Third, markets are less likely to coordinate when traders can source products from many locations, and more likely to do so when sourcing options are limited. These findings suggest that product characteristics, market geography and sourcing conditions shape governance choices in wholesale markets. Government investment in wholesale markets is a crucial element of food market policy. However, the governance system of these markets can also be considered an element of public policy that could be wholly or partly led by the government and private sector. Understanding whether, how much and why coordination is occurring is the first step that governments need to guide the design of policies that support coordination where it is determined to improve market operations.