Trade partner diversification boosts efficiency in new futures exchange, increasing participation.
The study looked at how well companies can protect themselves from price changes in a new salmon futures market in Norway. By analyzing data on how companies buy and sell salmon, the researchers found that bigger companies with more diverse trading partners are better at reducing their risks. These companies can match their internal prices with the market price, making it easier for them to use the futures market. This is important because fewer companies are using the salmon futures market lately.