The impact of credit constraints on the adoption of hybrid maize in Malawi

Dr. Franklin Peter Simtowe, Manfred Zeller and Aliou Diagne
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Manfred Zeller: University of Hohenheim, Institute of Agricultural Economics and Social Sciences in the Tropics and Subtropics, Germany
Aliou Diagne: Africa Rice Centre, Cotonou, Benin

Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, 2009, vol. 90, issue 1, pages 5-22

Abstract: This paper investigates the impact of credit constraints on the adoption of hybrid maize among rural households in Malawi. To address the endogenous and binary nature of the household's credit constraints status, we employ a treatment-effects model to consistently estimate the effect of credit constraints. Results reveal that after effectively correcting for endogeneity, credit constraints have a negative and significant effect on the amount of land allocated to hybrid maize. Results also show that farmers with larger land holdings allocate more land to hybrid maize. Although less likely to report credit constraints, older farmers allocate less land to hybrid maize than younger farmers. These findings suggest that there is scope for increasing the cultivation of hybrid maize in Malawi if credit is targeted at younger farmers that are credit-constrained.

Keywords: credit constraints; hybrid maize; adoption; treatment-effect; endogenous; Malawi (search for similar items in EconPapers)
JEL-codes: C31 D13 Q12 Q14 (search for similar items in EconPapers)
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:rae:jourae:v:90:y:2009:i:1:p:5-22

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