The role of social networks in an imperfect market for agricultural technology products: Evidence on Bt cotton adoption in Pakistan

Xingliang Ma (), David Spielman, Hina Nazli, Patricia Zambrano, Fatima Zaidi and Shahzad Kouser

No 175276, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Social networks play an important role in generating learning externalities that can drive the diffusion of innovative, and potentially poverty-reducing, technologies. This is particularly the case in developing countries where rural education, extension, and agricultural information services are underprovided. The recent introduction of genetically modified insect-resistant Bt (Bacillus thuringiensis) cotton in Pakistan represents an example where imperfect markets, weak extension services, and information asymmetries limit the ability of farmers to make informed decisions on how to take best advantage of the technology. This study explores the role of social networks and learning externalities in the adoption of Bt cotton in Pakistan. We model how information from social network members influences farmers’ adoption decisions, controlling for farmers’ characteristics, cotton growing conditions, and other possible information sources. We apply our model to a representative sample of 728 cotton-growing households randomly selected in 2012-13 from 52 villages across Punjab and Sindh. We also assess the role of input dealers, progressive farmers, public extension agents, and farmers’ individual characteristics in the uptake of the technology. Results suggest that communication within social networks helps disseminate information about Bt cotton cultivation and has encouraged its adoption.

Keywords: Agricultural and Food Policy; Community/Rural/Urban Development; Institutional and Behavioral Economics; International Development; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 31
Date: 2014
New Economics Papers: this item is included in nep-agr, nep-dev, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:175276

DOI: 10.22004/ag.econ.175276

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