Adoption of modern weaving technology in the handloom micro-enterprises in Assam: A Double Hurdle approach

Technological uplift is imperative for enterprises to achieve and sustain competitiveness in terms of both cost and quality of products. While the literature on technology adoption is voluminous, studies focused on adoption related issues concerning rural, nonfarm, and informal micro-entrepreneurs in developing economies are few and far between. In view of significance of these enterprises in employment and income generation at the lower end of income distribution in developing countries, a study of factors influencing adoption of modern technology in such enterprises assumes importance. Using firm-level data collected through a primary survey, the present paper analyses the determinants of adoption and extent of deployment of weaving technologies in the handloom micro-enterprises in rural areas of Assam. The results of the Cragg's Double Hurdle model reveal the significance of financial inclusion, availability of family labor, and social network on adoption and extent of deployment of weaving technologies. The presence of proper market linkages also appears to be crucial for adoption and use of such technologies in the rural areas. The study urges for a comprehensive policy framework to tackle the existing bottlenecks related to access to credit/capital, market linkages, and extension services to promote the technology adoption among the rural micro-entrepreneurs.