The impact of credit on the technical efficiency of food crop producing smallholder farmers in Ethiopia
Purpose: This study examines the impact of access to credit on the technical efficiency (TE) of maize-producing smallholder farmers in Ethiopia and explores factors determining credit utilization. Design/methodology/approach: The study relies on nationally representative data collected in 2015/2016. The data are analyzed by combining the Propensity Score Matching technique with a stochastic frontier model that corrects selectivity bias arising from unobserved variables. Findings: The result shows that credit service improves TE and helps smallholder farmers to achieve the maximum possible output level from a given set of inputs used. Originality/value: To the best of author’s knowledge, no study has yet measured the impact of access to credit on TE by controlling for both observed and unobserved heterogeneities. Existing research relied on a single production frontier model, assuming that credit users and non-users have similar production characteristics or ignored selection bias due to observable and unobservable characteristics.
Year of publication: |
2021
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Authors: | Koricho, Melkamu Girma ; Ahmed, Musa Hasen |
Published in: |
Agricultural Finance Review. - Emerald, ISSN 0002-1466, ZDB-ID 2401135-6. - Vol. 82.2021, 5 (28.10.), p. 847-856
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Publisher: |
Emerald |
Saved in:
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