Technology adoption, capital deepening, and international productivity differences

Chaoran Chen

Journal of Development Economics, 2020, vol. 143, issue C

Abstract: I document that cross-country differences in capital intensity are much larger in the agricultural sector than in the nonagricultural sector. To explain this fact, I build a model featuring technology adoption with fixed costs among heterogeneous farmers. More productive farmers operating larger farms pay the fixed cost and adopt a modern capital-intensive technology, while less productive ones choose a traditional labor-intensive technology. The model is calibrated using historical data on farmer adoption of mechanized technology in postwar America. This calibrated model is then employed to perform cross-country comparisons. Incorporating a technology adoption channel not only allows the model to predict substantial differences in agricultural capital intensity between rich and poor countries that an otherwise identical model would fall short in generating, but also improve explanatory power for cross-country agricultural productivity differences by 1.5-fold.

Keywords: Agricultural productivity; Technology adoption; Capital intensity; Mechanization; Structural transformation (search for similar items in EconPapers)
JEL-codes: E13 O11 O41 Q12 Q16 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304387818314184
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Technology Adoption, Capital Deepening, and International Productivity Differences (2017)
Working Paper: Technology Adoption, Capital Deepening, and International Productivity Differences (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:143:y:2020:i:c:s0304387818314184

DOI: 10.1016/j.jdeveco.2019.102388

Access Statistics for this article

Journal of Development Economics is currently edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().