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Access to credit and heterogeneous effects on agricultural technology adoption: Evidence from large rural surveys in Ethiopia

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Relation http://oar.icrisat.org/12279/
https://onlinelibrary.wiley.com/doi/epdf/10.1111/cjag.12329
https://doi.org/10.1111/cjag.12329
 
Title Access to credit and heterogeneous effects on agricultural
technology adoption: Evidence from large rural surveys in
Ethiopia
 
Creator Regassa, M D
Degnet, M B
Melesse, M B
 
Subject Rural Development
Statistics
Ethiopia
 
Description Modern agricultural technologies hold huge potential for increasing productivity and reducing poverty in developing countries. However, adoption levels of these technologies have remained disappointingly low in Africa. This paper
analyzes the effect of access to credit on the likelihood of adoption and use intensity of chemical fertilizers using data from large rural surveys in Ethiopia. Using a heteroscedasticity-based identification strategy to address the endogenous nature of access to credit, we find that access to credit has significant positive effects on adoption and intensity of use of chemical fertilizers. However, important heterogeneities are observed. Credit obtained from formal sources is more important for the intensity of use than for the decision to adopt chemical
fertilizers. Credit taken with the primary purpose of financing agricultural inputs is more likely to promote adoption of chemical fertilizers than credit taken per
se. Furthermore, reported credit effects are larger when estimated against the sample of credit-constrained non-users as compared with the pool of the whole sample of credit non-users. The results remain robust to several sensitivity analyses. Our results yield useful implications for the design, promotion, and targeting of credit services to leverage their effect on adoption of agricultural technologies.
 
Publisher Wiley
 
Date 2023-02
 
Type Article
PeerReviewed
 
Format application/pdf
 
Language en
 
Rights cc_by_nc_nd
 
Identifier http://oar.icrisat.org/12279/1/Canadian%20Journal%20of%20Agricultural%20Economics_71_231-253_2023.pdf
Regassa, M D and Degnet, M B and Melesse, M B (2023) Access to credit and heterogeneous effects on agricultural technology adoption: Evidence from large rural surveys in Ethiopia. Canadian Journal of Agricultural Economics, 71. pp. 231-253. ISSN 1744-7976