Social networks and factor markets: panel data evidence from Ethiopia
Research output: Working paper › Research
Documents
- Social networks and factor markets: panel data evidence from Ethiopia
Final published version, 919 KB, PDF document
In the absence of well-established factor markets, the role of indigenous institutions and social networks can be substantial for mobilizing factors for agricultural production. We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. Using detailed longitudinal household survey data and employing a difference-in-differences approach, we find that iddir membership improves households’ access to factor markets. Specifically, we find that joining an iddir network improves households’ access to land, labor and credit transactions between 7 and 11 percentage points. Furthermore, our findings also indicate that iddir networks crowd-out borrowing from local moneylenders (locally referred as Arata Abedari), a relatively expensive credit source, virtually without affecting borrowing from formal credit sources. These results point out the roles non-market arrangements, such as social networks, can play in mitigating market inefficiencies in poor rural markets.
Original language | English |
---|---|
Place of Publication | Frederiksberg |
Publisher | Department of Food and Resource Economics, University of Copenhagen |
Number of pages | 39 |
Publication status | Published - 2014 |
Series | IFRO Working Paper |
---|---|
Number | 2014/12 |
Number of downloads are based on statistics from Google Scholar and www.ku.dk
No data available
ID: 134753985