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Effect of financial knowledge on performance of women farm enterprises in Kenya

Effect of financial knowledge on performance of women farm enterprises in Kenya PurposeFinancial knowledge (FK) is considered one of the major factors influencing performance of farm enterprises. The purpose of this paper is to examine the effect of FK on performance of women farm enterprises. Performance is measured using levels of savings and enterprise margins.Design/methodology/approachThe study uses primary data of 384 farmers from three sub-counties in Kericho County, Kenya. It employs a propensity score matching (PSM) approach to control for possible selection bias and to model the impact of FK on performance of women farm enterprises.FindingsThe analysis reveals that high FK has a significant positive impact on performance of women farm enterprises. Specifically, respondents with higher levels of FK were also associated with higher amounts of savings and enterprise margins.Research limitations/implicationsEconometrically, robust strategies were employed using PSM to ensure minimal estimation bias. Although PSM captures selection bias due to observable characteristics, it fails to capture selection bias due to unobservable factors.Originality/valueThe paper contributes to the growing debate on the role played by FK on performance of small and micro enterprises. It provides insights on the state of FK among women farmers and identifies knowledge gaps and policy implications from a developing country perspective. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Agribusiness in Developing and Emerging Economies Emerald Publishing

Effect of financial knowledge on performance of women farm enterprises in Kenya

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2044-0839
DOI
10.1108/JADEE-06-2018-0083
Publisher site
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Abstract

PurposeFinancial knowledge (FK) is considered one of the major factors influencing performance of farm enterprises. The purpose of this paper is to examine the effect of FK on performance of women farm enterprises. Performance is measured using levels of savings and enterprise margins.Design/methodology/approachThe study uses primary data of 384 farmers from three sub-counties in Kericho County, Kenya. It employs a propensity score matching (PSM) approach to control for possible selection bias and to model the impact of FK on performance of women farm enterprises.FindingsThe analysis reveals that high FK has a significant positive impact on performance of women farm enterprises. Specifically, respondents with higher levels of FK were also associated with higher amounts of savings and enterprise margins.Research limitations/implicationsEconometrically, robust strategies were employed using PSM to ensure minimal estimation bias. Although PSM captures selection bias due to observable characteristics, it fails to capture selection bias due to unobservable factors.Originality/valueThe paper contributes to the growing debate on the role played by FK on performance of small and micro enterprises. It provides insights on the state of FK among women farmers and identifies knowledge gaps and policy implications from a developing country perspective.

Journal

Journal of Agribusiness in Developing and Emerging Economies – Emerald Publishing

Published: Jun 25, 2019

References

  • Culture, financial literacy, and SME performance in Ghana
  • Leaning and empowerment: designing a financial literacy tool to teach long-term investing to illiterate women in rural India
  • The foundations of financial inclusion: understanding ownership and use of formal accounts
  • The effects of perceived and actual financial literacy on financial behaviors
  • Determinants of financial literacy: analysis of the influence of socio-economic and demographic variables
  • Determinants of working-students financial literacy at the University of Cape Coast, Ghana
  • Poverty reduction effects of agricultural technology adoption: a micro-evidence from rural Tanzania