1. Credit constraint and agricultural technology adoptions: evidence from Ethiopia.
- Author
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Lemecha, Megersa Endashaw
- Abstract
Purpose: This paper investigates constraints to yield enhancing technology adoptions, highlighting credit using data pooled from the first three waves of the Ethiopian socio-economic surveys. Design/methodology/approach: Direct elicitation methodology is used to identify household's non-price credit rationing status. The panel selection model specified to examine causal effects of credit constraint on adoption variables allows us to tackle self-selection into adoptions and potential endogeneity of credit constraint while controlling for unobserved heterogeneity in both the selection and main equations. Findings: Results show that about 54% of sample households face credit rationing, predominantly demand-side risk rationing. There is a negative association between measures of credit constraint status and adoption variables. The effect is stronger when the demand-side credit rationing is accounted for and when within household variation in credit constraint status overtime is considered as opposed to across constrained and unconstrained households. Practical implications: Expanding physical access to institutional credit alone may not necessarily spur increased uptake of credit and instant investment by farm households. For a majority of them to take advantage of available credit and improved technology, interventions should also aim at minimizing downside risks. Originality/value: This paper incorporates the role of downside risk in influencing farmer's decisions to uptake credits and subsequently his/her adoption behaviors. The researcher approached the topic by state-of-the-art method which allows obtaining more reliable results and hence more specific contributions to research and practice. [ABSTRACT FROM AUTHOR]
- Published
- 2023
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