Journal
AMERICAN ECONOMIC REVIEW
Volume 106, Issue 6, Pages 1320-1365Publisher
AMER ECONOMIC ASSOC
DOI: 10.1257/aer.20131061
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Funding
- Private Enterprise Development in Low-Income Countries Project by the CEPR
- UK Department for International Development
- Spanish Ministry of Science and Innovation [ECO-2011-25624]
- Spanish Ministry of Economy and Competitiveness [RYC-2012-11979]
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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.
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