Agricultural Productivity and Structural Transformation: Evidence from Brazil
CREI; Universitat Pompeu Fabra; Barcelona GSE
Universitat Pompeu Fabra
University of Chicago - Booth School of Business
June 1, 2015
We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor bias of technical change. We test the predictions of the model by studying the introduction of genetically engineered soybean seeds in Brazil, which had heterogeneous effects on agricultural productivity across areas with different soil and weather characteristics. We find that technical change in soy production was strongly labor saving and led to industrial growth, as predicted by the model.
Number of Pages in PDF File: 51
Keywords: agricultural productivity, structural transformation, industrial development, labor saving technical change, genetically engineered soy
JEL Classification: F16, F43, 014, Q16
Date posted: August 14, 2013 ; Last revised: June 17, 2015
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