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Industrialization without Innovation

Author

Listed:
  • Paula Bustos
  • Juanma Castro-Vincenzi
  • Joan Monràs
  • Jacopo Ponticelli
Abstract
Labor-saving technologies in agriculture can foster structural transformation by re- leasing workers who find jobs in manufacturing. The traditional view is that factor reallocation towards manufacturing Generates innovation and productivity growth. We document, instead, that regions more exposed to a large and exogenous in- crease in agricultural productivity in Brazil industrialized but experienced lower manufacturing productivity growth. Workers released from agriculture were mostly unskilled and primarily moved to the least skill-intensive manufacturing industries. This paper explores the various Mechanisms that can account for the observed manufacturing productivity decline. Changes in worker composition and lower incentives to innovate within manufacturing play prominent roles.

Suggested Citation

  • Paula Bustos & Juanma Castro-Vincenzi & Joan Monràs & Jacopo Ponticelli, 2024. "Industrialization without Innovation," Working Papers 1444, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1444
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    References listed on IDEAS

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    Cited by:

    1. Clement Imbert & Marlon Seror & Yifan Zhang & Yanos Zylberberg, 2022. "Migrants and Firms: Evidence from China," American Economic Review, American Economic Association, vol. 112(6), pages 1885-1914, June.
    2. Heitor Pellegrina & Sebastian Sotelo, 2019. "Migration, Specialization and Trade: Evidence from the Brazilian March to the West," 2019 Meeting Papers 863, Society for Economic Dynamics.
    3. Wolfgang Britz & Roberto Roson & Martina Sartori, 2019. "SSP Long Run Scenarios for European NUTS2 Regions," Working Papers 2019: 22, Department of Economics, University of Venice "Ca' Foscari".
    4. André Albuquerque Sant’Anna & Lucas Costa, 2019. "Bailing out environmental liabilities: moral hazard and deforestation in the Brazilian Amazon," Documentos de Trabajo 17435, The Latin American and Caribbean Economic Association (LACEA).

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    More about this item

    Keywords

    agricultural productivity; skill-biased technical change; productivity; labor mobility; genetically engineered soy; Brazil;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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