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Technology Adoption and Access to Credit via Mobile Phones

Author

Listed:
  • Apoorv Gupta

    (Northwestern University)

  • Jacopo Ponticelli

    (Northwestern University & CEPR)

  • Andrea Tesei

    (Queen Mary University of London, CEPR, CEP (LSE) & CESifo)

Abstract

Farmers in developing countries often lack access to timely and reliable information about modern technologies that are essential to improve agricultural productivity. The recent diffusion of mobile phones has the potential to overcome these barriers by making information available to those previously unconnected. In this paper we study the effect of mobile phone network expansion in rural India on adoption of high yielding variety seeds and chemical fertilizers. Our empirical strategy exploits geographical variation in the construction of mobile phone towers under a large government program targeting areas without existing coverage. To explore the role of mobile phones in mitigating information frictions we analyze the content of 1.4 million phone calls made by farmers to a major call center for agricultural advice. Farmers seek advice on which seed varieties and fertilizers better meet their needs and how to use them. We find that areas receiving mobile phone coverage experience higher adoption of these technologies. We also observe that farmers are often unaware of the eligibility criteria and loan terms offered by subsidized credit programs. Consistently, we find that areas receiving mobile phone coverage experience higher take-up of agricultural credit.

Suggested Citation

  • Apoorv Gupta & Jacopo Ponticelli & Andrea Tesei, 2019. "Technology Adoption and Access to Credit via Mobile Phones," Working Papers 892, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:892
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    More about this item

    Keywords

    India; Agriculture; HYV Seeds; Credit Card;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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