The Interrelated Impacts of Credit Access, Market Access and Forest Proximity on Livelihood Strategies in Cambodia

86 Pages Posted: 8 Mar 2021 Last revised: 10 Aug 2021

See all articles by John S. Felkner

John S. Felkner

Florida State University, Department of Urban & Regional Planning

Hyun Lee

Analysis Group, Inc.

Sabina Shaikh

University of Chicago - Program on Global Environment

Alan Kolata

University of Chicago, Department of Anthropology

Michael Binford

University of Florida, Department of Geography

Date Written: July 30, 2020

Abstract

Livelihood diversification strategies for households in developing countries are influenced by access to financial credit, to markets and to forests. Understanding their interrelated impacts has important implications for development policy, including for market access, credit provision, and forest conservation. Using a two-round panel survey of 2,417 households in 64 villages in four Provinces in Cambodia and geospatial analysis, we analyze the influence of formal and informal financial credit, market and road access, and forest access on livelihood diversification strategies. Using econometric techniques to control for interrelated effects, we find credit utilization is significant with off-farm business and wage livelihood activities, land transactions, livestock activities, and remittances. Households below the poverty line use credit primarily for consumption and agricultural investments, but above the poverty line for business investment or for buying land, houses, or vehicles. Market access is significant with total income and expenditures, as well as portfolio shifts to off-farm business and wage activities. Forest access contributes significantly to both total income and expenditures in multivariable regressions controlling for credit and market access, and we find evidence that poverty alleviation is maximized when households have both high forest and market access. We do not find that, in aggregate, households near to forests are in a “poverty trap” due to market remoteness, but we do find that they are disadvantaged in pursuing agricultural livelihoods and households with both low forest and market access are poorest. Using the technique of dominance analysis, we find that financial credit contributes more than market or forest access to total income, expenditures, and livestock income. However, market access is more important than credit for off-farm, on-farm and crop incomes. Forest access contributes more to total income than road access when controlling for access to Phnom Penh and is more important than credit for crop livelihoods.

Keywords: rural livelihoods, Mekong River Basin, Cambodia, Forests, Credit Access

JEL Classification: Q01, Q12, Q23, Q56, O44, O53

Suggested Citation

Felkner, John S. and Lee, Hyun and Shaikh, Sabina and Kolata, Alan and Binford, Michael, The Interrelated Impacts of Credit Access, Market Access and Forest Proximity on Livelihood Strategies in Cambodia (July 30, 2020). Available at SSRN: https://ssrn.com/abstract=3763128 or http://dx.doi.org/10.2139/ssrn.3763128

John S. Felkner (Contact Author)

Florida State University, Department of Urban & Regional Planning ( email )

Tallahasse, FL 32306
United States
1-850-491-3266 (Phone)

HOME PAGE: http://https://coss.fsu.edu/durp/faculty/john-felkner/

Hyun Lee

Analysis Group, Inc. ( email )

One South Dearborn
21st Floor
Chicago, IL 60603
United States

Sabina Shaikh

University of Chicago - Program on Global Environment ( email )

United States

Alan Kolata

University of Chicago, Department of Anthropology ( email )

Illinois, IL 60637
United States
(773) 702-7729 (Phone)

HOME PAGE: http://https://anthropology.uchicago.edu/people/faculty/alan-kolata

Michael Binford

University of Florida, Department of Geography ( email )

3141 Turlington Hall
PO Box 117315
Gainesville, FL 32611
United States
(352) 294-7500 (Phone)

HOME PAGE: http://users.clas.ufl.edu/mbinford/

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