New Journal Paper on Non-Convex Transaction Costs and Land Rental Market Participation in Malawi

The paper is published as a  New Journal Paper  and can be downloaded here

Abstract of the paper
We assess how non-convex transaction costs constrain access to and participation in the land rental market by smallholder farmers within Sub-Saharan Africa. The theory suggests a dynamic externality due to such transaction costs and that orchestrated participation can reduce such costs and enhance future participation. We use dynamic random effects probit and Tobit models with balanced panel data from Malawi to assess participation on the tenant side of the market. We observe that initial and earlier land rental market participation significantly increases participation in subsequent years, consistent with dynamic non-convex transaction costs and possible entry barriers in the market.

Published 23. October 2021 - 7:31 - Updated 23. October 2021 - 7:31