Working Paper: NBER ID: w27350
Authors: Farid Farrokhi; Heitor S. Pellegrina
Abstract: We study the effects of globalization on agricultural productivity across countries. We develop a multi-country general equilibrium model that incorporates choices of crops and technologies in agricultural production at the micro-level of fields covering the surface of the earth. We estimate our model using field-level data on potential yields of crops under different technologies characterized by factor and input intensity. We evaluate the welfare and productivity gains from reductions in trade costs of agricultural outputs and inputs across countries between 1980 and 2015. In addition to gains from international crop specialization, we find notable gains from access to foreign agricultural inputs. This mechanism operates through a shift from traditional (labor-intensive) technologies to modern (input-intensive) ones.
Keywords: Globalization; Agricultural Productivity; Trade Costs; Technology Adoption; Efficiency Gains
JEL Codes: F10; F14; F60; Q16; R14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reductions in trade costs for agricultural inputs (Q17) | Increase in the share of land allocated to modern technologies (Q15) |
| Increase in the share of land allocated to modern technologies (Q15) | Enhancement of agricultural productivity (Q16) |
| Globalization (F60) | Increase in agricultural yields (Q16) |
| Globalization (F60) | Increase in real consumption of agriculture (Q11) |
| Globalization (F60) | Increase in overall welfare (D69) |
| Input-side mechanisms (O36) | Global welfare gains from globalization (F69) |