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Agricultural Productivity and Structural Transformation. Evidence from Brazil

  • Paula Bustos
  • Bruno Caprettini
  • Jacopo Ponticelli

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 lead to industrial growth, as predicted by the model.

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Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 736.

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Date of creation: Jun 2015
Date of revision:
Handle: RePEc:bge:wpaper:736
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  1. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037 - 1078.
  2. Ngai, Liwa Rachel & Pissarides, Christopher, 2004. "Structural Change in a Multi-Sector Model of Growth," CEPR Discussion Papers 4763, C.E.P.R. Discussion Papers.
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  11. Fajgelbaum, Pablo & Grossman, Gene M. & Helpman, Elhanan, 2011. "Income distribution, product quality, and international trade," Policy Research Working Paper Series 5843, The World Bank.
  12. Pablo D. Fajgelbaum, 2011. "Income Distribution, Product Quality and International Trade," 2011 Meeting Papers 415, Society for Economic Dynamics.
  13. Francisco J. Buera & Joseph P. Kaboski, 2009. "Can Traditional Theories of Structural Change Fit The Data?," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 469-477, 04-05.
  14. Richard Hornbeck & Pinar Keskin, 2012. "Does Agriculture Generate Local Economic Spillovers? Short-run and Long-run Evidence from the Ogallala Aquifer," NBER Working Papers 18416, National Bureau of Economic Research, Inc.
  15. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941 Elsevier.
  16. Vogel, Stephen J, 1994. "Structural Changes in Agriculture: Production Linkages and Agricultural Demand-Led Industrialization," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 136-56, January.
  17. Wright, Gavin, 1979. "Cheap Labor and Southern Textiles before 1880," The Journal of Economic History, Cambridge University Press, vol. 39(03), pages 655-680, September.
  18. Fernandez-Cornejo, Jorge & Hendricks, Chad & Mishra, Ashok K., 2005. "Technology Adoption and Off-Farm Household Income: The Case of Herbicide-Tolerant Soybeans," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(03), December.
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