Does credit matter for technology adoption? A global meta-analysis comparing classical and Bayesian approaches

Introduction The limited access to financial services has remained a major constraint for smallholder farmers in the adoption of improved agricultural technologies globally. Although the issue has been studied extensively using empirical data, the strength of the association between the adoption of credit and improved agricultural technologies remains ambiguous. Methods This study examines the global empirical literature on the association between access to agricultural credit and the adoption of agricultural technologies by smallholder farmers using a systematic review and meta-analysis of 52 studies conducted in different countries. A classical random-effects and Bayesian hierarchical meta-analytic framework has been used in this study in order to compare the results obtained using different methodologies. Results and discussion The results obtained from both methods show that the association between credit access and technology adoption is positive, which indicates that the probability of farmers who have access to credit and adopt improved agricultural technologies is greater than double compared to those who do not have access. However, the extremely high level of heterogeneity shows that the strength of the association between credit and technology adoption varies significantly. Moreover, the diagnostics of publication bias show that the effect of credit access on the adoption of improved agricultural technologies might be affected by small study biases, which indicates that the effect of credit access might be less than double. Overall, the results obtained in this study show that the access to credit plays a significant facilitating role in the adoption of improved agricultural technologies, but the effectiveness of credit access depends significantly on the level of institutional factors. These findings are also relevant to the Sustainable Development Goals, particularly SDG 1 and 2, as improved access to credit can support more inclusive agricultural growth and better food security.