Agricultural Productivity and Structural Transformation: Evidence from Brazil
Journal
American Economic Review
ISSN
0002-8282
Type
journal article
Date Issued
2016
Author(s)
Bustos, Paula
Caprettini, Bruno
Ponticelli, Jacopo
Abstract
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.