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Effect of Commodity Exchange on the Economy- Prospects and Challenges

Author

Listed:
  • Huda, Md Nazmul
  • Hossain, Sayed Mohammad Athar
  • Shaturaev, Jakhongir

Abstract

Commodity exchanges can play an important role in market development by increasing efficiency, reducing transaction costs, and providing price risk management tools. However, establishing and operating a successful commodity exchange in a developing country can be challenging. The key challenges include: small market size and lack of liquidity, weak infrastructure, lack of legal and regulatory support, lack of awareness and understanding of commodity exchanges among market participants, and government interventions that can distort market prices. Policy interventions that can be used to address these challenges and promote the development of successful commodity exchanges in developing countries include: providing financial support, developing the necessary infrastructure, creating a legal and regulatory framework, and raising awareness of commodity exchanges among market participants.

Suggested Citation

  • Huda, Md Nazmul & Hossain, Sayed Mohammad Athar & Shaturaev, Jakhongir, 2023. "Effect of Commodity Exchange on the Economy- Prospects and Challenges," MPRA Paper 118331, University Library of Munich, Germany, revised 14 Mar 2023.
    • Handle: RePEc:pra:mprapa:118331
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    File URL: https://mpra.ub.uni-muenchen.de/118331/1/Effect%20of%20Commodity%20Exchange%20on%20the%20Economy.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Commodity exchange; financial market; stock market; securities and exchange commission;
    All these keywords.

    JEL classification:

    • K0 - Law and Economics - - General
    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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