Access to Markets and Technology Adoption in the Agricultural Sector: Evidence from Brazil

Diego Astorga Rojas
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Diego Astorga Rojas: Pontificia Universidad Javeriana

Vniversitas Económica, 2024, vol. 24, issue 2, No 2024-04-21, 37 pages

Abstract: This paper studies how better market access through infrastructure improvements leads to the adoption of new agricultural technologies. In particular, I study the case of Brazil, and how the construction of the federal highway network from 1950 to 2000 affected the modernization of the agricultural sector. To address endo- geneity concerns, I use the creation of Brasilia, and the project to connect it to the state capitals, as a natural experiment. I build a predicted network of highways by computing the cheapest way to connect the state capitals with Brasilia and use it to instrument market access. I find that municipalities where market access increased adopted new agricultural inputs such as fertilizers and pesticides, improving agricultural productivity as a result. Market access also increased the machinery and equipment used for production, but only when Brazil deregulated its agricultural markets and opened to international trade, after 1990.

Keywords: agricultural productivity; infrastructure; market access; mechanization (search for similar items in EconPapers)
JEL-codes: F14 O13 O18 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:col:000416:021412

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