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NOPOOR Policy Brief Nr.30: Innovation Adoption and Liquidity Constraints in the Presence of Grassroots Extension Agents: Evidence from the Peruvian Highlands

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This policy brief is aimed at identifying the constraints to innovation adoption in agricultural production in developing economics. It focuses on the effect of a program aimed at activating a market for technical innovations in the region of Highlands in Peru. The authors find that innovations were widely adopted and that liquidity constraints played only a limited role. They show that this is driven by two main reasons: (1) some key innovations were cheap and/or divisible and (2) the extension agents lifted liquidity constraints by providing credit to help the purchase of inputs.

Image: © IRD - Gardon, Jacques