The Ethiopian government is promoting large-scale agricultural investment in lowland regions of the country, claiming that the investment could improve livelihoods of the local people. The outcomes of the investment, however, have been a controversial issue in public and academic discourses. Particularly, studies that quantify the impact of such investment on the asset base of local people are extremely limited. The main purpose of this study is, therefore, to investigate the actual effect of the investment on the asset of the local people and inform policy decision.
This study employs a quasi-experimental research design and a mixed research approach. Data were collected from 342 households drawn through a systematic sampling technique and analysed by using multiple correspondence analysis and propensity score matching.
The study finds that the investment has a significant negative impact on the wealth status of affected households and deteriorated their asset base.
The results imply that inclusive and fair business models that safeguard the benefits of the investment hosting community and encourage a strong collaboration and synergy between the community and private investors are needed.
This study analyses the impact of large-scale agricultural investment on the asset of affected community based on various livelihood capital. In doing so, it significantly contributes to knowledge gap in the empirical literature. It also contributes to the ongoing academic and policy debates based on actual evidence collected from local community.
