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Article
Publication date: 4 May 2012

Glenn Pederson, Wonho Chung and Roelof Nel

The purpose of this paper is to determine if there are positive microeconomic effects from a state‐funded loan participation program on farm productivity and investment behavior.

Abstract

Purpose

The purpose of this paper is to determine if there are positive microeconomic effects from a state‐funded loan participation program on farm productivity and investment behavior.

Design/methodology/approach

The authors take the approach that access to credit solves a liquidity problem. If a credit constraint exists it results in a suboptimal allocation of resources and a reduction in farm output and profitability. A two‐stage regression model approach is used to analyze farmer survey and loan application data. In the first stage, a probit regression model is used to identify the farmers who are likely to be credit rationed. In the second stage, switching regression models are used to observe the effect of credit rationing on farm productivity and on farm investment behavior.

Findings

It is found that there are liquidity effects of credit constraints for a significant share of the beginning and low‐resource farmers who participated in the state‐funded farm loan program. After controlling for various farm and farmer characteristics, the estimated productivity and investment demand equations imply that a 1 percent increase in credit received by credit constrained farmers under the state program increased their gross income by about 0.49 percent, and their investments in depreciable assets by about 0.33 percent.

Originality/value

This paper is the first to apply the switching regression model to a state‐funded farm loan program for the purpose of evaluating the financial impacts on farmer participants.

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Article
Publication date: 4 February 2019

Claudia Pigini and Stefano Staffolani

The purpose of this paper is to investigate the determinants of the probability of being a teleworker and the extent of earnings differentials between teleworkers and…

Abstract

Purpose

The purpose of this paper is to investigate the determinants of the probability of being a teleworker and the extent of earnings differentials between teleworkers and traditional employees.

Design/methodology/approach

The analysis is grounded on a theoretical framework depicting endogenous telework assignment and wage variations based on individual bargaining. The empirical strategy allows for non-random telework assignment, generating from individual- and job-specific observed as well as unobserved factors.

Findings

Results are based on the Italian labor force survey and uncover a key role of gender, higher education and family composition as determinants of the probability of teleworking. Furthermore, teleworkers enjoy a wage premium ranging between 2.7 and 8 percent.

Originality/value

Accounting for observed individual and job-specific effects, by both standard linear regression and propensity score matching, largely reduces the extent of wage premium emerging from unconditional descriptives; the results of an endogenous switching regression model however suggest that failing to properly care for unobserved factors leads to the underestimation of returns to telework.

Details

International Journal of Manpower, vol. 40 no. 2
Type: Research Article
ISSN: 0143-7720

Keywords

Content available
Article
Publication date: 1 October 2020

Xiaohui Huang, Qian Lu and Fei Yang

This paper aims to build a theoretical model of the impact of farmers’ adoption behavior of soil and water conservation measures on the agricultural output to analyze the…

Abstract

Purpose

This paper aims to build a theoretical model of the impact of farmers’ adoption behavior of soil and water conservation measures on the agricultural output to analyze the impact of farmers’ adoption behavior of soil and water conservation measures on agricultural output.

Design/methodology/approach

Based on the field survey data of 808 farmers households in three provinces (regions) of the Loess Plateau, this paper using the endogenous switching regression model to analyze the effect of farmers’ adoption behavior of soil and water conservation measures on agricultural output.

Findings

Soil erosion has a significant negative impact on agricultural output, and soil erosion has a significant positive impact on farmers’ adoption of soil and water conservation measures. Farmers adopt soil and water conservation measures such as engineering measures, biological measures and tillage measures to cope with soil erosion, which can increase agricultural output. Based on the counterfactual hypothesis, if farmers who adopt soil and water conservation measures do not adopt the corresponding soil and water conservation measures, their average output per ha output will decrease by 2.01%. Then, if farmers who do not adopt soil and water conservation measures adopt the corresponding soil and water conservation measures, their average output per ha output will increase by 12.12%. Government support and cultivated land area have a significant positive impact on farmers’ adoption behavior of soil and water conservation measures.

Research limitations/implications

The research limitation is the lack of panel data.

Practical implications

Soil erosion has a significant negative impact on agricultural output, and soil erosion has a significant positive impact on farmers’ adoption of soil and water conservation measures. Farmers adopt soil and water conservation measures such as engineering measures, biological measures and tillage measures to cope with soil erosion, which can increase agricultural output.

Social implications

The conclusion provides a reliable empirical basis for the government to formulate and implement relevant policies.

Originality/value

The contributions of this paper are as follows: the adoption behavior of soil and water conservation measures and agricultural output are included into the same analytical framework for empirical analysis, revealing the influencing factors of farmers’ adoption behavior of soil and water conservation measures and their output effects, enriching existing research. Using endogenous switching regression model and introducing instrumental variables to overcome the endogenous problem between the adoption behavior of soil and water conservation measures and agricultural output, and to analyze the influencing factors of farmers’ adoption behavior of soil and water conservation measures and its impact on agricultural output. Using the counter-factual idea to ensure that the two matched individuals have the same or similar attributes, to evaluate the average treatment effect of the behavior of soil and water conservation measures, to estimate the real impact of adaptation measures on agricultural output as accurately as possible and to avoid misleading policy recommendations.

Details

International Journal of Climate Change Strategies and Management, vol. 12 no. 5
Type: Research Article
ISSN: 1756-8692

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Article
Publication date: 15 December 2020

Abdoul Karim Diamoutene and John Baptist D. Jatoe

The aim of this paper is to analyze the effects of access to credit on maize productivity in Mali, by identifying the determinants of credit market participation and maize…

Abstract

Purpose

The aim of this paper is to analyze the effects of access to credit on maize productivity in Mali, by identifying the determinants of credit market participation and maize yield, and then estimating the impact of credit on maize yield.

Design/methodology/approach

This study analyzes the impact of credit on maize productivity using data from the World Bank 2014 Living Standards Measurement Survey (LSMS) on Mali, and the endogenous switching regression (ESR) model.

Findings

The results suggest a positive effect of credit on maize yield in Mali. Farm size, production shocks and the female gender exert negative effects on credit market participation, unlike education, intercropping with cotton, male family labor and fertilizer use which show positive effects. Farm size has a negative effect on maize yield, but both male family labor, and fertilizer use exert positive effects. Although the use of credit improves agricultural yields, the results show a greater potential effect for rationed producers, than credit users.

Research limitations/implications

These results suggest that implementing a credit strategy that allows those currently excluded from the credit market, to participate, could substantially increase productivity and maize production output in furtherance of the country's food security strategy. Gender-based targeting is needed to bridge the gender gap in access to credit.

Originality/value

As far as the authors are aware, this study is the first to explore the credit-farm productivity links in Mali, while addressing selection bias.

Details

Agricultural Finance Review, vol. 81 no. 3
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 13 March 2017

Temesgen Fitamo Bocher, Bamlaku Alamirew Alemu and Zerihun Getachew Kelbore

The purpose of this paper is to investigate how credit access affects the welfare of households and sheds light on how household characteristics influence the decision to…

Abstract

Purpose

The purpose of this paper is to investigate how credit access affects the welfare of households and sheds light on how household characteristics influence the decision to take credit and the efficiency in credit use.

Design/methodology/approach

This study uses data from the fourth round of the Ethiopian Rural Household Survey conducted in 2009, and examines factors that determine the decision to take credit and the effect of such decision on household welfare. The household welfare variable is measured by the food security indicator and total food expenditure. The study employs endogenous Regime Switching model to account for endogeneity in access to credit and self-selection bias in the decision to participate in credit.

Findings

The result from the kernel distribution shows households with access to credit have more consumption expenditure than those without access to credit. The ordinary least square regression shows that access to credit increases total consumption by 12 percent without considering self-selection bias. Participation in non-farm activity increases the demand for credit by 17 percent. Land holding, household size, and participation in saving associations increase the probability of getting credit by 5, 11, and 20 percent, respectively. Access to credit appears to have a positive impact on food security in both actual and counterfactual cases for the current credit receivers.

Originality/value

This study provides a thorough analysis of the impacts of access to credit on household welfare in Ethiopia. The study contributes to the debate on the link between access to credit and household welfare and provides valuable input for policy makers.

Details

African Journal of Economic and Management Studies, vol. 8 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

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Article
Publication date: 15 September 2020

Khoi Kim Dang, Thiep Huy Do, Thi Ha Lien Le, Thi Thu Hang Le and Thinh Duc Pham

The Vietnamese Mekong River Delta (VMD) is one of the most affected deltas by climate change in the world. Several studies have investigated factors influencing farmers'…

Abstract

Purpose

The Vietnamese Mekong River Delta (VMD) is one of the most affected deltas by climate change in the world. Several studies have investigated factors influencing farmers' climate change adaptation behaviors in the region; however, little is known about the effectiveness of such measures. This paper examines the determinants of adaptation strategies among VMD rice farmers and assesses the impacts of such practices on rice yield.

Design/methodology/approach

Endogenous switching regressions were employed using a survey data of 300 rice-producing households in An Giang and Tra Vinh provinces in 2016.

Findings

The results show that farmers receiving early disaster warnings are more likely to adopt adaptation measures to climate change. If nonadaptors had chosen to respond, their rice yield would have increased by 0.932 tons/ha/season.

Research limitations/implications

The data sample is small and collected from two provinces in the VMD only; therefore, the results may be specific for the study sites. However, future research can adopt the proposed method for other regions.

Originality/value

The study estimates the production impacts of farmers' decisions on whether or not to adapt to extreme climate events. The proposed approach allows for capturing both observed and unobserved behaviors.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 11 no. 1
Type: Research Article
ISSN: 2044-0839

Keywords

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Article
Publication date: 2 November 2012

Fengxia Dong, Jing Lu and Allen M. Featherstone

The purpose of this paper is to examine the effect of credit constraints on agricultural productivity in China.

Abstract

Purpose

The purpose of this paper is to examine the effect of credit constraints on agricultural productivity in China.

Design/methodology/approach

Using data from a rural financial survey, a switching regression model is used to account for endogeneity and heterogeneity. Carter presents three ways that credit might affect the production functions; a shift along a given production surface by allowing an optimal level of inputs, a shift the production surface out by allowing the purchase of more efficient inputs, and the third is to increase net revenue by more intensive use of fixed inputs and resources. Thus, the effects of factors on agricultural productivity may not be independent of credit status; therefore, separate functions for credit‐constrained and non‐constrained households are examined.

Findings

Empirical estimates of the impacts of credit constraints on agricultural productivity are provided for the Heilongjiang province, a major agricultural production area, in Northeast China. By removing credit constraints, average agricultural productivity was estimated to be increased by 75 percent. Under credit constraints, labor inputs, along with a farmers' education, cannot be fully employed because of an inappropriate mix of inputs.

Research limitations/implications

Young farmers may not be able to leverage their comparative advantage for physically intensive farm work under credit constraints. Because of data limitations, the research does not include information on informal credit in the estimation, which may underestimate the effects of credit constraints.

Originality/value

This study provides an analysis of the impacts of credit constraints on rural household productivity for the Heilongjiang province, a major agricultural production region, in Northeast China.

Details

Agricultural Finance Review, vol. 72 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

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Article
Publication date: 26 July 2013

Xuan Shen and Valentina Hartarska

The purpose of this paper is to estimate the impact of financial derivatives on profitability in agricultural banks. Agricultural banks are new to the derivatives market…

Abstract

Purpose

The purpose of this paper is to estimate the impact of financial derivatives on profitability in agricultural banks. Agricultural banks are new to the derivatives market and are unlikely to use financial derivatives for risk speculation. Thus, the paper also provides evidence on the effectiveness of financial derivatives as a risk management tool in small commercial banks.

Design/methodology/approach

The authors use call report data from Federal Reserve Bank of Chicago for 2006, 2008 and 2010 to estimate an endogenous switching model to evaluate how profitability of derivatives user and non‐user agricultural banks is affected by different risk factors. This approach allows banks' endogenous choices to use financial derivatives to be accounted for, and to build a counterfactual analysis – what user banks' profitability would have been if they did not participate in the derivatives activities.

Findings

Results indicate that risk management through financial derivatives in agricultural banks is effective and profitability of derivatives user agricultural banks is less affected by credit risk and interest risk in the sample period. Derivatives' activities have improved agricultural banks' profitability and these impacts were increasing over years. In particular, in 2010 without use of derivatives, user banks would have had one‐third lower profitability.

Originality/value

This research is the first to study the role of derivatives in agricultural banks and also provides empirical evidence on the effectiveness of risk management through financial derivatives in agricultural banks.

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Article
Publication date: 26 September 2019

Kokou E. Adabe, Abbevi G. Abbey, Irene S. Egyir, John K.M. Kuwornu and Henry Anim-Somuah

Due to rapid urbanization, rice consumption in Togo has also rapidly increased. Most consumers prefer imported rice over domestically produced rice due to the higher…

Abstract

Purpose

Due to rapid urbanization, rice consumption in Togo has also rapidly increased. Most consumers prefer imported rice over domestically produced rice due to the higher quality of the imported rice. The purpose of this paper is to show that it is possible to upgrade the quality of Togo’s domestically produced rice by providing technical and management support in the form of contract farming.

Design/methodology/approach

Cross-sectional data were collected using a multi-stage sampling technique. An endogenous switching regression model was used for data analysis.

Findings

The results show that by participating in contract farming, paddy rice quality was upgraded from Grade IV (poor quality) to Grade I (premium quality). The factors influencing this upgrade in the quality of paddy rice grown through contract farming are: the number of extension visits to the farmer, the mode of threshing used by the farmer, and the agro-ecological zone of the farmer.

Research limitations/implications

The data for this study are limited to one country, Togo and this may have implications for generalizing the results for other countries.

Originality/value

This study is original research that contributes to an improved understanding of the impacts of contract farming on the quality of agricultural products produced in developing and emerging economies.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 9 no. 4
Type: Research Article
ISSN: 2044-0839

Keywords

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Article
Publication date: 6 January 2021

Abraham Zakaria, Shaibu Baanni Azumah, Gilbert Dagunga and Mark Appiah-Twumasi

The purpose of this study is to estimate the profitability of rice production for irrigated and rain-fed farmers; determine the factors that influence farmers' decision to…

Abstract

Purpose

The purpose of this study is to estimate the profitability of rice production for irrigated and rain-fed farmers; determine the factors that influence farmers' decision to participate in irrigation and the impact of irrigation on rice farmers' profitability in northern Ghana.

Design/methodology/approach

Using cross-sectional data collected from 543 rice farmers in northern Ghana, the study employed both non-parametric (cost benefit analysis) and parametric (endogenous switching regression) approaches to analyse the data.

Findings

The empirical results reveal a significant difference between the profits of irrigated (GHS 2442.30) and rain-fed farmers (GHS 576.20), as well as the cost-benefit ratios between irrigators (2.53) and rain-fed farmers (1.37). Also, participation in irrigation was found to be influenced by relatively small farm size and off-farm income; while profitability was influenced by membership in a farmer-based organization, access to agricultural extension services and perception of decreasing rainfall intensity. Irrigation also had a positive significant net impact on profitability of rice production.

Research limitations/implications

The results provide justification for development partners and the government of Ghana through the “one-village-one-dam” policy, to invest in irrigation in northern Ghana in order to improve household welfare as well as build resilience for sustainable production systems.

Originality/value

This study is the first of its kind to provide a robust analysis of the difference in profits of rain-fed and irrigated rice farmers while estimating the determinants of Ghanaian farmers' choice of either of the regimes within a bias-corrected framework.

Details

Agricultural Finance Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0002-1466

Keywords

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