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The Impact of Access to Credit on the Adoption of hybrid maize in Malawi: An Empirical test of an Agricultural Household Model under credit market failure

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  • Simtowe, Franklin
  • Zeller, Manfred

Abstract

Guided by the frame work of a household model under credit market failure, this paper aims at investigating the impact of access to credit on the adoption of hybrid maize among households that vary in their credit constraints. The data used in the study is from Malawi collected by the International Food Policy Research Institute (IFPRI).Using the direct elicitation approach; households are classified into constrained and unconstrained regimes. The impact of access to credit is estimated using a switching regression in a Double-Hurdle model. Results reveal that while access to credit increases adoption among credit constrained households, it has no effect among unconstrained households. Results also show that factors that affect adoption among credit constrained households are different from those that that affect adoption among unconstrained household

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  • Simtowe, Franklin & Zeller, Manfred, 2008. "The Impact of Access to Credit on the Adoption of hybrid maize in Malawi: An Empirical test of an Agricultural Household Model under credit market failure," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52076, African Association of Agricultural Economists (AAAE).
  • Handle: RePEc:ags:aaae07:52076
    DOI: 10.22004/ag.econ.52076
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    Cited by:

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    4. Finagnon Antoine Dedewanou & Rolande C. B. Kpekou Tossou, 2022. "Remittances and agricultural productivity in Burkina Faso," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1573-1590, September.
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    6. Yu, Lili & Zhao, Duanyang & Xue, Zihao & Gao, Yang, 2020. "Research on the use of digital finance and the adoption of green control techniques by family farms in China," Technology in Society, Elsevier, vol. 62(C).
    7. Bola Amoke Awotide & Adebayo Ogunniyi & Kehinde Oluseyi Olagunju & Lateef Olalekan Bello & Amadou Youssouf Coulibaly & Alexander Nimo Wiredu & Bourémo Kone & Aly Ahamadou & Victor Manyong & Tahirou Ab, 2022. "Evaluating the Heterogeneous Impacts of Adoption of Climate-Smart Agricultural Technologies on Rural Households’ Welfare in Mali," Agriculture, MDPI, vol. 12(11), pages 1-16, November.
    8. Frederick Murdoch Quaye & Valentina Hartarska, 2016. "Investment Impact of Microfinance Credit in Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(3), pages 137-150, March.
    9. Adams, Abdulai & Jumpah, Emmanuel Tetteh & Caesar, Livingstone Divine, 2021. "The nexuses between technology adoption and socioeconomic changes among farmers in Ghana," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    10. Ojo, T. & Baiyegunhi, L., 2018. "Determinants of Adaptation Strategies to Climate Change among Rice Farmers in Southwestern Nigeria: A Multivariate Probit Approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277011, International Association of Agricultural Economists.
    11. Julián Aramburu & Mario González & Lina Salazar & Paul Winters, 2014. "When a Short-term Analysis is not a Short-term Approach: Impacts of Agricultural Technology Adoption in Bolivia," IDB Publications (Working Papers) 86815, Inter-American Development Bank.
    12. Mekonnen, Tigist, 2017. "Willingness to pay for agricultural risk insurance as a strategy to adapt climate change," MERIT Working Papers 2017-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Girmay Berhe Araya, 2020. "Impact of Ethiopia's productive safety net program on manure use by rural households: Evidence from Tigrai, Northern Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 51(5), pages 725-742, September.
    14. Yi, Fujin & Sun, Dingqiang & Zhou, Yingheng, 2015. "Grain subsidy, liquidity constraints and food security—Impact of the grain subsidy program on the grain-sown areas in China," Food Policy, Elsevier, vol. 50(C), pages 114-124.
    15. Aslihan Arslan & Kristin Floress & Christine Lamanna & Leslie Lipper & Solomon Asfaw & Todd Rosenstock, 2020. "IFAD RESEARCH SERIES 63 - The adoption of improved agricultural technologies - A meta-analysis for Africa," IFAD Research Series 304758, International Fund for Agricultural Development (IFAD).
    16. Yi, Fujin & Lu, Wuyi & Zhou, Yingheng, 2015. "Cash Transfers and Multiplier Effect: Lessons from the Grain Subsidy Program in China," 2015 Conference, August 9-14, 2015, Milan, Italy 211877, International Association of Agricultural Economists.
    17. Mulwa, Chalmers & Marenya, Paswel & Rahut, Dil Bahadur & Kassie, Menale, 2015. "Response to Climate Risks among Smallholder Farmers in Malawi: A Multivariate Probit Assessment of the Role of Information, Household Demographics and Farm Characteristics," 2015 Conference, August 9-14, 2015, Milan, Italy 212511, International Association of Agricultural Economists.
    18. Aramburu, Julián & González, Mario & Salazar, Lina & Winters, Paul, 2018. "When a Short-term Analysis is not a Short-term Approach: Impacts of Agricultural Technology Adoption in Bolivia," IDB Publications (Working Papers) 6676, Inter-American Development Bank.
    19. Yi, Fujin & Sun, Dingqiang, 2014. "Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169779, Agricultural and Applied Economics Association.
    20. Kankwamba, Henry & Mangisoni, Julius H. & Simtowe, Franklin & Mausch, Kai & Siambi, Moses, 2012. "Improved Legume Seed Demand Systems in Central Malawi: What Do Farmers' Seed Expenditures Say about Their Preferences?," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123945, International Association of Agricultural Economists.

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