Technology Adoption, Capital Deepening, and International Productivity Differences

Chaoran Chen

Working Papers from University of Toronto, Department of Economics

Abstract: Cross-country differences in capital intensity are larger in agriculture than in the non-agricultural sector. I build a two-sector model featuring technology adoption in agriculture. As the economy develops, farmers gradually adopt modern capital-intensive technologies to replace traditional labor-intensive technologies, as is observed in the U.S. historical data. Using this model, I find that technology adoption is key to explaining lower agricultural capital intensity and labor productivity in poor countries. By allowing for technology adoption, my model can explain 1.56-fold more in rich-poor agricultural productivity differences. I further show that land misallocation impedes technology adoption and magnifies productivity differences.

Keywords: Agricultural Productivity; Technology Adoption; Capital Intensity; Misallocation. (search for similar items in EconPapers)
JEL-codes: E13 O41 Q12 Q16 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2017-06-05
New Economics Papers: this item is included in nep-agr, nep-eff, nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Technology adoption, capital deepening, and international productivity differences (2020)
Working Paper: Technology Adoption, Capital Deepening, and International Productivity Differences (2017)
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