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Abstract
Declining soil fertility is one of the major agricultural problems in Republic of Benin. It leads to low yields and high production costs of crops. To improve soil fertility and alleviate its consequences, ISFMT are continuously promoted in the country. This paper makes an empirical contribution in addressing the paucity of evidence regarding the heterogeneous effect of ISFMT adoption on Allocative Inefficiency (AI) of maize farms. A correlated random coefficient model assuming a factor-structure for the unobserved covariates combined with instrumental variables (IV) was specified. The multinomial endogenous treatment and mixed discrete-continuous outcome were jointly estimated using the Generalized Structural Equation Model (GSEM) package. The model is estimated for a sample of 431 maize producers located in 19 villages in north-East of Republic of Benin with four ISFMT (Mucuna pruriens (MP), Crop Residue (CR), Cattle Manure (CM), and Pigeon Pea (PP)), The results consistently suggest that adopting any of the four ISFMT, significantly decreases the AI scores of the maize farms. On average, the largest decrease of maize farm AI stems from adopting PP, followed by CM and CR. Moreover, we find that the effects of adopting ISFMT vary depending on the gender of farmer, the use of mineral fertilizer and whether the maize farm is located in cotton area of the north of Republic of Benin. To reduce the AI of maize farm, policy makers should put more emphasis in ISFMT promotion for wider adoption by Beninese maize farmers