Working Paper: NBER ID: w25992
Authors: Federico Droller; Martin Fiszbein
Abstract: We investigate how historical patterns of primary production influenced development across local economies in Argentina. Our identification strategy exploits exogenous variation in the composition of primary production induced by climatic features. We find that locations specializing in ranching had weaker linkages with other activities, higher concentration in land ownership, lower population density, and less immigration than cereal-producing areas. Over time, ranching localities continued to exhibit lower population density and they experienced relatively sluggish industrialization. Ultimately, ranching specialization had large negative effects on long-run levels of income per capita and human capital.
Keywords: Agricultural Economics; Economic Development; Argentina; Ranching; Cereals
JEL Codes: N16; N56; N96; O13; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ranching specialization (Q12) | lower investment in agricultural machinery (Q14) |
| ranching specialization (Q12) | reduced railroad density (R49) |
| ranching specialization (Q12) | limited development of agro-processing industries (L66) |
| ranching specialization (Q12) | land concentration (Q24) |
| land concentration (Q24) | income inequality (D31) |
| ranching specialization (Q12) | thinner local markets (D49) |
| ranching specialization (Q12) | lower levels of industrialization (L69) |
| ranching specialization (Q12) | persistent low population density (J11) |
| reduction of one standard deviation in ranching specialization (Q29) | increase in long-run levels of population density (J11) |
| reduction of one standard deviation in ranching specialization (Q29) | increase in income per capita (O49) |
| early agricultural production patterns (Q12) | development trajectory of local economies (R11) |