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"You Quit?" Influence of Neighbor Experience and Exit on Small Farmer Market Participation

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  • Michelson, Hope

Abstract

This research analyzes the relationship between a farmers' participation in Nicaraguan supermarket supply chains and the market entries and exit of neighboring farmers. Drawing on insights from the technology adoption literature on learning and experimentation, we incorporate measures of neighbor experience into a model of a farmer's decision to join or quit these markets. We also test for strategic delay by small farmers and estimate the price that some farmers may pay for experimentation. Our results suggest both that that neighbors' exits negatively influence a farmer's own decision to join the supply chain and that some farmers engage in strategic delay. Early adopters bear costs of their neighbors' "free riding" in the form of higher product rejection rates and lower annual transactions with supermarkets. Evidence of strategic delay on the part of farmers suggests a social process rather than a firm-level roll out of new contracts within a given village.

Suggested Citation

  • Michelson, Hope, 2015. ""You Quit?" Influence of Neighbor Experience and Exit on Small Farmer Market Participation," MPRA Paper 62239, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62239
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    Cited by:

    1. Songsermsawas, Tisorn & Baylis, Kathy & Chhatre, Ashwini & Michelson, Hope, 2016. "Can Peers Improve Agricultural Revenue?," World Development, Elsevier, vol. 83(C), pages 163-178.

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    More about this item

    Keywords

    contract farming; supermarkets; market adoption; Latin America; Walmart; Nicaragua; strategic delay;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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