Towards understanding the role of Social Capital within Adoption Decision Processes: An application to adoption of irrigation technology
Department of Agricultural Economics and Rural Development, University of Göttingen
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Recently, social capital has gained in importance in explaining technology adoption decisions by farmers. In this paper, we examined the impact of social capital on irrigation technology and scheduling adoption among wine producers in Central Chile. Within this context, we defined seven different components of social capital: general trust, trust in institutions, trust in water communities, norms, formal networks, informal networks, and size of networks. Using a partial least square model, we estimated the impact of these seven factors along with indicators of physical and human capital. As expected, physical and human capital have a positive and significant relationship with adoption, and regarding social capital variables the most relevant were formal networks and the size of network. Importantly, the model results also allowed for determining the impact of human capital and trust as key variables for the building of networks. Thus, human capital and general trust have also an indirect impact on the decision to adopt. It can be argued that in social capital the main catalyst are networks, which in turn are fed by, trust and human capital, hence extension efforts should consider social networks in promoting agricultural innovations, and not just economic or individual level predictors.