Remittance Inflows and Adoption of Agricultural Technology: Evidence from Ethiopia

Abstract

This study investigates the effect of remittance on agricultural technology adoption in rural Ethiopia using cross-sectional data from the Ethiopian Socioeconomic Survey collected in 2015/16. To estimate the effect of remittance on the adoption of agricultural technology, this study employs probit regression, IV Probit, and 2SLS methods. Data for analysis is obtained from 2316 sample households drawn from regions of Tigray, Amhara, Oromia, and south nation nationalities and peoples. The results show that the effect of remittances on agricultural technology adoption is negative and significant. The results also show that the education level of the household head, Tropical livestock unit, extension visit, credit access, and land ownership right has positive effects on agricultural technology adoption; and distance to market, zonal town, and plot have a negative effect on the probability of adoption. Therefore, policy measures aim to enhance the skills of migrants and enabling them to channel remittances to productivity-enhancing agricultural capital and inputs might help improve productivity.