Agricultural commercialization and asset growth for poverty reduction: Evidence from panel data for rural Vietnam

Oliver Schulte, Julian Mumber and Trung Thanh Nguyen

TVSEP Working Papers from Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP

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 commercialization on the capability of rural households to accumulate assets and on 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 commercialization has a positive effect on the accumulation of assets and reduces multidimensional and structural poverty over time. However, the effect is not homogeneous and larger for households not mainly engaged in rice commercialization. This suggests that commercialization can be a path out of poverty, especially if policy makers move towards utilizing other crops instead of rice.

Keywords: Asset growth; Asset-based income; Commercialization; Fixed effects; Instrumental variable; Control function (search for similar items in EconPapers)
JEL-codes: C21 I32 Q12 Q13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-04
New Economics Papers: this item is included in nep-agr, nep-dev and nep-sea
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