E-Agribusiness Adoption and Market Efficiency: The Moderating Role of Rural Digital Infrastructure

Abstract

The digitization of agriculture through e-agribusiness platforms offers transformative opportunities for enhancing market efficiency, reducing transaction costs, and improving farmers’ income. E-agribusiness adoption refers to the utilization of digital tools, mobile applications, online marketplaces, and farm management software to streamline production, marketing, and distribution processes. These platforms enable farmers to access market information, track supply chains, optimize pricing, and engage in direct sales, contributing to more efficient agricultural markets. This study investigates the impact of e-agribusiness adoption on market efficiency, focusing on the moderating role of rural digital infrastructure (RDI). RDI encompasses the availability, accessibility, and quality of internet connectivity, mobile networks, and digital services in rural areas. Robust RDI is hypothesized to amplify the benefits of e-agribusiness adoption, facilitating seamless digital transactions, timely information flow, and effective market linkages. A quantitative research design was employed, targeting farmers, agribusiness entrepreneurs, and rural market stakeholders engaged with e-agribusiness platforms. Structured questionnaires measured e-agribusiness adoption, market efficiency, and rural digital infrastructure readiness. Data were analyzed using Smart PLS structural equation modeling to evaluate the direct effect of e-agribusiness adoption on market efficiency and the moderating influence of RDI. Results indicate that e-agribusiness adoption positively influences market efficiency by reducing information asymmetry, lowering transaction costs, and enhancing price discovery. Rural digital infrastructure significantly moderates this relationship, highlighting that regions with better connectivity and digital services enable farmers to fully leverage e-agribusiness platforms. The findings underscore the importance of combining digital adoption with infrastructural development to enhance agricultural market performance and sustainability. Policy implications include investing in rural digital infrastructure, promoting farmer digital literacy, and incentivizing adoption of e-agribusiness solutions to achieve inclusive and efficient agricultural markets.