Paper #1403

Title:

Agricultural productivity and structural transformation. Evidence from Brazil

Authors:

Paula Bustos, Bruno Caprettini and Jacopo Ponticelli

Date:

July 2012 (Revised: June 2015)

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 lead to industrial growth, as predicted by the model.

Keywords:

Agricultural Productivity, Structural Transformation, Industrial Development, Labor Saving Technical Change, Genetically Engineered Soy.

JEL codes:

F16, F43, 014, Q16.

Area of Research:

Macroeconomics and International Economics

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