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Agricultural commercialisation, asset growth and poverty in rural Vietnam

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  • Schulte, Oliver
  • Mumber, Julian
  • Nguyen, Trung Thanh

Abstract

Poverty remains a substantial threat in rural areas of many developing countries, and solving this problem requires an in-depth understanding of the income generating capacity that determines poverty. This paper examines the impact of agricultural commercialisation on the capability of rural households to accumulate and productively use assets and reduce structural and multidimensional poverty. A longitudinal dataset of around 2000 households with a total of 9781 observations from five rural surveys undertaken in the period 2008–2017 in Vietnam is used. Results from a fixed effects regression with an instrumental variable and a control function approach show that agricultural commercialisation has a positive effect on the accumulation of assets and reduces multidimensional and structural poverty over time. However, the effect is not homogeneous and is larger for households that are not mainly engaged in rice commercialisation. This suggests that commercialisation can be a path out of poverty, especially if policy makers move towards utilising other crops instead of rice.

Suggested Citation

  • Schulte, Oliver & Mumber, Julian & Nguyen, Trung Thanh, 2023. "Agricultural commercialisation, asset growth and poverty in rural Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(03), April.
    • Handle: RePEc:ags:aareaj:343049
    DOI: 10.22004/ag.econ.343049
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    3. Narmandakh, Davaatseren & Marenya, Paswel & Opie, Hellen & Bett, Charles, 2024. "Crop production diversity or market access? Welfare outcomes among sorghum-growing households in rural Kenya and Uganda," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344362, International Association of Agricultural Economists (IAAE).

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