IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v109y2018icp483-496.html
   My bibliography  Save this article

The Effect of Agricultural Technology on the Speed of Development

Author

Listed:
  • Eberhardt, Markus
  • Vollrath, Dietrich

Abstract

We examine heterogeneity in the elasticity of agricultural output with respect to labor. Employing panel data from 128 countries over a forty-year period we find distinct heterogeneity in the elasticity of agricultural output with respect to labor. This elasticity is lowest in countries with temperate and/or cold climate regions, and higher in countries including tropical or highland regions. This agricultural parameter determines the speed of structural change following changes in agricultural productivity or population. Calibration shows shifts in labor allocations and welfare will be 2–3 times larger in temperate regions than in tropical or highland regions.

Suggested Citation

  • Eberhardt, Markus & Vollrath, Dietrich, 2018. "The Effect of Agricultural Technology on the Speed of Development," World Development, Elsevier, vol. 109(C), pages 483-496.
  • Handle: RePEc:eee:wdevel:v:109:y:2018:i:c:p:483-496
    DOI: 10.1016/j.worlddev.2016.03.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X16000620
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2016.03.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lawrence C. Hamilton, 1992. "How Robust is Robust Regression?," Stata Technical Bulletin, StataCorp LP, vol. 1(2).
    2. Markus Eberhardt & Christian Helmers & Hubert Strauss, 2013. "Do Spillovers Matter When Estimating Private Returns to R&D?," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 436-448, May.
    3. Mundlak, Yair & Butzer, Rita & Larson, Donald F., 2012. "Heterogeneous technology and panel data: The case of the agricultural production function," Journal of Development Economics, Elsevier, vol. 99(1), pages 139-149.
    4. Gollin, Douglas & Parente, Stephen L. & Rogerson, Richard, 2007. "The food problem and the evolution of international income levels," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1230-1255, May.
    5. Gollin, Douglas, 2010. "Agricultural Productivity and Economic Growth," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 4, chapter 73, pages 3825-3866, Elsevier.
    6. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 129-173.
    7. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
    8. McMillan, Margaret & Rodrik, Dani & Verduzco-Gallo, Íñigo, 2014. "Globalization, Structural Change, and Productivity Growth, with an Update on Africa," World Development, Elsevier, vol. 63(C), pages 11-32.
    9. Tiffen, Mary, 2003. "Transition in Sub-Saharan Africa: Agriculture, Urbanization and Income Growth," World Development, Elsevier, vol. 31(8), pages 1343-1366, August.
    10. Coakley, Jerry & Fuertes, Ana-Maria & Smith, Ron, 2006. "Unobserved heterogeneity in panel time series models," Computational Statistics & Data Analysis, Elsevier, vol. 50(9), pages 2361-2380, May.
    11. repec:dgr:rugggd:gd-98 is not listed on IDEAS
    12. Kiminori Matsuyama, 2009. "Structural Change in an Interdependent World: A Global View of Manufacturing Decline," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 478-486, 04-05.
    13. Donald W. K. Andrews, 2005. "Cross-Section Regression with Common Shocks," Econometrica, Econometric Society, vol. 73(5), pages 1551-1585, September.
    14. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    15. Uy, Timothy & Yi, Kei-Mu & Zhang, Jing, 2013. "Structural change in an open economy," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 667-682.
    16. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    17. repec:hoo:wpaper:e-92-3 is not listed on IDEAS
    18. Markus Eberhardt & Francis Teal, 2013. "Structural Change and Cross-Country Growth Empirics," World Bank Economic Review, World Bank Group, vol. 27(2), pages 229-271.
    19. Alexander Chudik & M. Hashem Pesaran & Elisa Tosetti, 2011. "Weak and strong cross‐section dependence and estimation of large panels," Econometrics Journal, Royal Economic Society, vol. 14(1), pages 45-90, February.
    20. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    21. Caroline Betts & Rahul Giri & Rubina Verma, 2017. "Trade, Reform, and Structural Transformation in South Korea," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 745-791, November.
    22. Francisco Alvarez-Cuadrado & Markus Poschke, 2011. "Structural Change Out of Agriculture: Labor Push versus Labor Pull," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(3), pages 127-158, July.
    23. Hayami, Yujiro & Ruttan, Vernon W, 1970. "Agricultural Productivity Differences Among Countries," American Economic Review, American Economic Association, vol. 60(5), pages 895-911, December.
    24. L. Gutierrez & M. M. Gutierrez, 2003. "International R&D spillovers and productivity growth in the agricultural sector. A panel cointegration approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(3), pages 281-303, September.
    25. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
    26. Dietrich Vollrath, 2011. "The agricultural basis of comparative development," Journal of Economic Growth, Springer, vol. 16(4), pages 343-370, December.
    27. Timmer, Marcel P. & Vries, Gaaitzen J. de, 2007. "A Cross-country Database For Sectoral Employment And Productivity in Asia and Latin America, 1950-2005," GGDC Research Memorandum GD-98, Groningen Growth and Development Centre, University of Groningen.
    28. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    29. Markus Eberhardt & Francis Teal, 2013. "No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 914-939, December.
    30. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    31. de Brauw, Alan & Mueller, Valerie & Lee, Hak Lim, 2014. "The Role of Rural–Urban Migration in the Structural Transformation of Sub-Saharan Africa," World Development, Elsevier, vol. 63(C), pages 33-42.
    32. Barbara J. Craig & Philip G. Pardey & Johannes Roseboom, 1997. "International Productivity Patterns: Accounting for Input Quality, Infrastructure, and Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1064-1076.
    33. Diao, Xinshen & Hazell, Peter & Thurlow, James, 2010. "The Role of Agriculture in African Development," World Development, Elsevier, vol. 38(10), pages 1375-1383, October.
    34. Jushan Bai, 2009. "Panel Data Models With Interactive Fixed Effects," Econometrica, Econometric Society, vol. 77(4), pages 1229-1279, July.
    35. Dorosh, Paul & Thurlow, James, 2014. "Can Cities or Towns Drive African Development? Economywide Analysis for Ethiopia and Uganda," World Development, Elsevier, vol. 63(C), pages 113-123.
    36. Collier, Paul & Dercon, Stefan, 2014. "African Agriculture in 50Years: Smallholders in a Rapidly Changing World?," World Development, Elsevier, vol. 63(C), pages 92-101.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hannah Gichungi & Beatrice Muriithi & Patrick Irungu & Gracious Diiro & John Busienei, 2021. "Effect of Technological Innovation on Gender Roles: The Case of Fruit Fly IPM Adoption on Women’s Decision-Making in Mango Production and Marketing in Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(3), pages 407-426, June.
    2. Baráth, Lajos & Fertő, Imre & Hockmann, Heinrich, 2020. "Technological differences, theoretical consistency, and technical efficiency: The case of Hungarian crop-producing farms," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-17.
    3. Fabio Monteforte & Mathan Satchi & Jonathan R. W. Temple, 2021. "Development priorities: the relative benefits of agricultural growth," Oxford Economic Papers, Oxford University Press, vol. 73(3), pages 1122-1152.
    4. Lajos Baráth & Imre Fertő & Štefan Bojnec, 2020. "The Effect of Investment, LFA and Agri‐environmental Subsidies on the Components of Total Factor Productivity: The Case of Slovenian Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 853-876, September.
    5. Hannah Gichungi & Beatrice Muriithi & Patrick Irungu & Gracious Diiro & John Busienei, 0. "Effect of Technological Innovation on Gender Roles: The Case of Fruit Fly IPM Adoption on Women’s Decision-Making in Mango Production and Marketing in Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-20.
    6. Tomasz Rokicki & Aleksandra Perkowska & Bogdan Klepacki & Piotr Bórawski & Aneta Bełdycka-Bórawska & Konrad Michalski, 2021. "Changes in Energy Consumption in Agriculture in the EU Countries," Energies, MDPI, Open Access Journal, vol. 14(6), pages 1-21, March.
    7. T. Ryan Johnson & Dietrich Vollrath, 2020. "The Role of Land in Temperate and Tropical Agriculture," Economica, London School of Economics and Political Science, vol. 87(348), pages 901-937, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Markus Eberhardt & Dietrich Vollrath, 2014. "Agricultural Technology and Structural Change," CSAE Working Paper Series 2014-21, Centre for the Study of African Economies, University of Oxford.
    2. Markus Eberhardt & Francis Teal, 2013. "No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 914-939, December.
    3. Markus Eberhardt & Andrea Filippo Presbitero, 2013. "This Time They're Different: Heterogeneity;and Nonlinearity in the Relationship;between Debt and Growth," Mo.Fi.R. Working Papers 92, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Eberhardt, Markus & Presbitero, Andrea F., 2015. "Public debt and growth: Heterogeneity and non-linearity," Journal of International Economics, Elsevier, vol. 97(1), pages 45-58.
    5. T. Ryan Johnson & Dietrich Vollrath, 2020. "The Role of Land in Temperate and Tropical Agriculture," Economica, London School of Economics and Political Science, vol. 87(348), pages 901-937, October.
    6. Markus Eberhardt & Francis Teal, 2020. "The Magnitude of the Task Ahead: Macro Implications of Heterogeneous Technology," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(2), pages 334-360, June.
    7. Teignier, Marc, 2018. "The role of trade in structural transformation," Journal of Development Economics, Elsevier, vol. 130(C), pages 45-65.
    8. Olivier Damette & Mathilde Maurel & Michael A. Stemmer, 2016. "What does it take to grow out of recession? An error-correction approach towards growth convergence of European and transition countries," Post-Print halshs-01318131, HAL.
    9. Andreas Exenberger & Andreas Pondorfer & Maik H. Wolters, 2014. "Estimating the impact of climate change on agricultural production: accounting for technology heterogeneity across countries," Working Papers 2014-16, Faculty of Economics and Statistics, University of Innsbruck.
    10. Cai, Wenbiao, 2015. "Structural change accounting with labor market distortions," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 54-64.
    11. Afonso, António & Jalles, João Tovar, 2013. "Growth and productivity: The role of government debt," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 384-407.
    12. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    13. Barker, Tom & Üngör, Murat, 2019. "Vietnam: The next asian Tiger?," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 96-118.
    14. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    15. Eberhardt, Markus & Teal, Francis, 2009. "A Common Factor Approach to Spatial Heterogeneity in Agricultural Productivity Analysis," MPRA Paper 15810, University Library of Munich, Germany.
    16. Daniel Goya, 2014. "The Multiple Impacts of the Exchange Rate on Export Diversification," Cambridge Working Papers in Economics 1436, Faculty of Economics, University of Cambridge.
    17. Daniel M. Bernhofen & Markus Eberhardt & Jianan Li & Stephen Morgan, 2015. "Assessing Market (Dis)Integration in Early Modern China and Europe," CESifo Working Paper Series 5580, CESifo.
    18. Sadorsky, Perry, 2014. "The effect of urbanization on CO2 emissions in emerging economies," Energy Economics, Elsevier, vol. 41(C), pages 147-153.
    19. Dong-Hyeon Kim & Shu-Chin Lin, 2017. "Natural Resources and Economic Development: New Panel Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 363-391, February.
    20. Esteban Lafuente & Zoltan J. Acs & Mark Sanders & László Szerb, 2020. "The global technology frontier: productivity growth and the relevance of Kirznerian and Schumpeterian entrepreneurship," Small Business Economics, Springer, vol. 55(1), pages 153-178, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:109:y:2018:i:c:p:483-496. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/worlddev .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.