Credit constraints, social networks, and green technology adoption: evidence from farmers' cooperatives in China

Abstract

Farmers' cooperatives are pivotal in modernizing Chinese agriculture. Departing from the conventional focus on technology adoption among individual farmers, this study shifts the lens to a burgeoning agricultural entity in China: farmers' cooperatives, and their green technology adoption behaviors. Utilizing survey data from 535 planting cooperatives in Henan and Shaanxi provinces, we identify credit constraints and empirically assess their impact on the adoption of green pest control technology (GPCT). Heckman selection model estimates indicate that credit constraints significantly bolster the cooperatives' willingness to adopt GPCT, yet concurrently suppress the extent of adoption. Mechanism analysis reveals that social networks, particularly external ones, significantly mitigate this suppressive effect. Heterogeneity analysis further highlights that informal credit constraints, cooperative product green certification, and asset scales of cooperatives exert diverse effect on GPCT adoption. These findings highlight the critical need to address credit constraints for farmers' cooperatives. We therefore recommend that governments strengthen institutional support and inclusive finance strategies, positioning cooperatives as central agents in promoting green technology adoption for sustainable agricultural transformation.