Journal of Productivity Analysis

, Volume 52, Issue 1–3, pp 37–55 | Cite as

The effects of access to credit on productivity: separating technological changes from changes in technical efficiency

  • Nusrat Abedin Jimi
  • Plamen V. NikolovEmail author
  • Mohammad Abdul Malek
  • Subal Kumbhakar


Improving productivity among farm enterprises is important, especially in low-income countries where market imperfections are pervasive and resources are scarce. Relaxing credit constraints can increase the productivity of farmers. Using a field experiment involving in Bangladesh, we estimated the impact of access to credit on the overall productivity of rice farmers, and disentangled the total effect into technological change (frontier shift) and technical efficiency changes. We found that relative to the baseline rice output per decimal, access to credit resulted in, on average, approximately a 14 percent increase in yield, holding all other inputs constant. After decomposing the total effect into the frontier shift and efficiency improvement, we found that, on average, around 11 percent of the increase in output came from changes in technology, or frontier shift, while the remaining 3 percent was attributed to improvements in technical efficiency. The efficiency gain was higher for modern hybrid rice varieties, and almost zero for traditional rice varieties. Within the treatment group, the effect was greater among pure tenant and mixed-tenant farm households compared with farmers that only cultivated their own land.


Field experiment Microfinance Credit Efficiency Productivity Farmers 

JEL classification

G21 G31 L25 I38 E22 H81 Q12 D2 O12 O16 



The field experiment was registered at the AEA RCT Registry (AEARCTR-0004460) and additional project information is available at Data analysis and ongoing data collection received an IRB approval from the Binghamton University HSRRC (STUDY00000449). Matthew Bonci and Declan Levine provided outstanding research support. We thank Seema Jaychandran, Eric Edmonds, David McKenzie, David Lam, Jessica Goldberg, Sam Asher, Rachel Heath, Jack Willis, Ruixue Jia, David Canning, Livia Montana, James Berry, Morgan Hardy, Zoe McLaren, Gil Shapira, Jeremy Barofksy, Denni Tommasi, Susan Wolcott, Neha Khanna, Solomon Polachek, Leila Salarpour, Emir Malikov, Jorgen Harris, Maulik Jagnani, seminar participants at NBER’s 10th Entrepreneurship Bootcamp, Cornell University’s Economics and AEM Departments, the 2016 Agricultural and Applied Economics Annual Meeting, and the 2017 Pacific Development Conference (PacDev) for constructive feedback and helpful comments. We acknowledge financial support from The International Initiative for Impact Evaluation (3ie) and The Lois De Fleur International Innovation Fund at The State University of New York (at Binghamton). This paper was accepted when Mohammad Abdul Malek was at BRAC Research and Evaluation Division, Dhaka, Bangladesh.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

Supplementary material

11123_2019_555_MOESM1_ESM.docx (190 kb)
Appendix B
11123_2019_555_MOESM2_ESM.docx (658 kb)
Appendix A


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsState University of New York (at Binghamton)BinghamtonUSA
  2. 2.Institute for Quantitative Social Science, Harvard UniversityCambridgeUSA
  3. 3.IZA Institute of Labor EconomicsBonnGermany
  4. 4.Faculty of Humanities and Social ScienceUniversity of TsukubaIbarakiJapan

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