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

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  • DePaula, Guilherme

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.

Suggested Citation

  • DePaula, Guilherme, 2023. "Bundled contracts and technological diffusion: Evidence from the Brazilian soybean boom," Journal of Development Economics, Elsevier, vol. 165(C).
    • Handle: RePEc:eee:deveco:v:165:y:2023:i:c:s0304387823001190
    DOI: 10.1016/j.jdeveco.2023.103163
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    More about this item

    Keywords

    Contract farming; Technological change; Economic development; Soybean; Biological nitrogen fixation; Brazil;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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