Bundled contracts and technological diffusion: Evidence from the Brazilian soybean boom

Guilherme DePaula

Journal of Development Economics, 2023, vol. 165, issue C

Abstract: Technological change in the 1970s and 1980s made it possible to grow soybeans in the remote Brazilian Savanna. However, multiple constraints typical of a developing region prevented many ranchers from adopting soybeans. Following the macroeconomic reforms that opened up the market in Brazil, international traders introduced a new farmer–trader contract that bundled technology, finance, inputs, and market access. The analysis of a novel panel dataset with farm-level census data reveals that this bundled contract led to rapid technological diffusion, agricultural expansion, and a 10-fold increase in agricultural productivity by enabling the conversion of marginal land into commercial soybean plantations.

Keywords: Contract farming; Technological change; Economic development; Soybean; Biological nitrogen fixation; Brazil (search for similar items in EconPapers)
JEL-codes: O13 O33 Q15 Q16 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:165:y:2023:i:c:s0304387823001190

DOI: 10.1016/j.jdeveco.2023.103163

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