Purpose
The purpose of this paper is to quantitatively analyse the changes in the functional efficiency of the six Chinese agricultural futures markets and compare the relative behaviour of different futures markets. In addition, this paper analyses the causes of differences in the functional efficiency of agricultural futures markets and advances policy suggestions.
Design/methodology/approach
The method used in this paper is the social loss index proposed by Stein (1981, 1986). This method can quantitatively measure the functional efficiency of agricultural futures markets from the perspective of social welfare. The indicator is calculated for the 2009–2017 period and for several sub-periods. The data are from the CSMAR research data services in China.
Findings
Preliminary results suggest that the longer it takes for an agricultural futures contract to reach maturity, the lower the functional efficiency of its market. Second, the functional efficiency of the agricultural futures markets in China is improved except for that of the wheat futures market. Finally, the corn futures market is most efficient probably due to the progress of marketization, while the strong wheat futures market is most inefficient probably due to the decrease in futures market liquidity.
Originality/value
This paper uses a more reasonable method to study the functional efficiency of Chinese agricultural futures markets and then analyses the causes of differences in the functional efficiency of agricultural futures markets.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.