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Rural credit and new technology adoption among family farms: evidence from two demonstration areas in China

Year: 2025

Type: article

Abstract: This study applies an asset portfolio investment framework to examine the impact of rural credit participation on the adoption of new agricultural technologies. Using field survey data from two family farm demonstration areas in China (Wuhan, Hubei Province, and Langxi, Anhui Province), the study employs the propensity score matching (PSM) method. The results show a significant positive relationship between rural credit and new technology adoption. Formal rural credit promotes the adoption of high-capital, low-risk technologies. In contrast, informal credit supports the adoption of low-capital, high-risk technologies. The effects of rural credit are stronger for large-scale family farms, which are better positioned to use financial resources for technological upgrades. Small-scale family farms benefit less in comparison. These findings highlight the role of financial mechanisms in agricultural modernization and emphasize the need for targeted rural financial policies to improve credit access and promote innovative technologies in family farming systems. JEL: Q16; O33

Source: Humanities and Social Sciences Communications

DOI: 10.1057/s41599-025-05491-7

Authors: Qianling Wang, Li Gui, Qianyue Meng, Huichuan Wang, Jingwen Hu

Institutions: Wuhan University, Hubei University Of Economics

Language: English

Topic: Agricultural Innovations and Practices

Subfield: General Agricultural and Biological Sciences

Field: Agricultural and Biological Sciences

Domain: Life Sciences

SDGs: Zero hunger, No poverty

Open Access status: gold

Estimated APC paid: $1,890