John S. Felkner, Ph.D., Associate Teaching Professor of Urban & Regional Planning at Florida State University, authored an article titled “The Interrelated Impacts of Credit Access, Market Access and Forest Proximity on Livelihood Strategies in Cambodia.” The article was published in the journal World Development alongside Hyun Lee, Ph.D., Sabina Shaikh, Ph.D., Alan Kolata, Ph.D., and Michael Binford, Ph.D. Below is a summary of the article written by doctoral student Martin Gandur (Ph.D. Political Science’ 25).
How does access to financial credit and markets, as well as proximity to forests, influence households’ livelihood strategies in the developing world? Several studies have noted the positive effects of market access, access to financial credit, and forest proximity on income, off-farm employment, and alleviation of poverty. However, scholars have studied as if these factors were independent from each other, which is unlikely in reality. For example, forests tend far away from markets, which are associated with access to financial credits. In turn, access to financial credit can improve forest use technology. Indeed, examining the interrelated impacts of access to markets, financial credit, and forests has important implications for policy and development practice, such as poverty reduction, infrastructure development, financial credit provision, natural resource conservation, and promotion of household and community resilience—especially for highly forest-dependent rural populations in the developing world.
John Felkner, Ph.D., and his co-authors examine the interrelated dynamics of market access, financial credit use and formal credit density, and forest access on livelihood income size and composition in Cambodia. The authors conducted a survey of 2,417 households in 64 villages in four provinces in Cambodia in 2005 and 2006. These provinces present a high diversity of economic activities and socio-economic conditions, as well as variation in accessibility to both forests and urban markets. The survey collected information on household demographics (including income), proximity to forests, market access, and financial credit use and access. The authors then use descriptive and statistical analysis to examine the relationship between these factors. Moreover, further statistical techniques examine which of the main effects (financial use/credit, market access, or forest access) has the greatest impact on livelihoods.
The analyses show that financial credit use and market access are generally associated with increased income in several categories (except crop income). The authors also find that travel time to large cities is associated with increased off-farm income, but on-farm and crop incomes where market distance is larger. Also, access to forests contributes to income benefits.
Moreover, when examining the most important impacts on livelihood incomes, the authors show that financial credit use is the dominant contributor to gross income and expenditures, and livestock income, while market access is the most important contributor for several on- and off-farm income and crop income. Forest access contributes is the third most important contributor to gross income. In sum, the results show that credit use is more important overall than market access, and forest access is more important than formal financial credit density.
The final set of results analyzed by the authors demonstrates, first, that the impact of financial credit on income is stronger in areas with improved access to large cities. Second, the relationship between forest access and incomes depends on the accessibility to markets. In particular, forest access is associated with higher income in areas close to primary roads (for gross income, expenditures, and off-farm incomes), and in areas close to secondary roads (for on-farm, crop, and livestock incomes). However, in areas closer to large cities, income levels increase with distance from forests, whereas in areas far from large cities incomes increase moving closer to forests. Third, the positive impact of financial credit use on incomes will increase with increasing distance from forests: in areas with high household credit use, incomes improve with distance from forests.
In conclusion, the authors make important contributions to the literature by showing that market, road, credit, and forest effects are interconnected and interdependent, but support each other. Moreover, this research has policy implications, as it suggests that policies for poverty reduction and forest conservation should be coordinated with the development of roads to improve potential forest returns.
To read the full journal article, click here. To learn more about the FSU Department of Urban and Regional Planning, visit coss.fsu.edu/durp.
APA Citation:
Felkner, J. S., Lee, H., Shaikh, S., Kolata, A., & Binford, M. (2022). The interrelated impacts of credit access, market access and forest proximity on Livelihood Strategies in Cambodia. World Development, 155, 105795. https://doi.org/10.1016/j.worlddev.2021.105795