Impact of informal institutions on youth agribusiness participation in southern Benin

Abstract

The agribusiness sector development is often portrayed as an essential component of economic development. Though Benin is a country with inestimable agricultural potential, the agribusiness sector appears unappealing to the local youths. Prior investigations diagnosed the impeding factors as a paucity of financial resource and a dearth of land and technical knowledge. This article departs from past studies by considering the importance of informal institutions for youth participation in the agribusiness sector. Exploring a rich data set of 478 youths aged 15 to 35, collected in Southern Benin based on the stratified random sampling technique, the article uses propensity score matching to address selection bias and logistic regression on the matched sample to link informal institutions to youth participation in agribusiness. Results highlight that agribusiness-unfriendly informal institutions discourage youth participation in the agribusiness sector. Though easing access to finance is crucial for the youths to initiate agribusiness activities, findings make a case for long-term policies that aim to increase the societal levels of trust and desirability for the agribusiness sector.