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Fertilizing growth: Agricultural inputs and their effects in economic development
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This paper estimates the role of agronomic inputs in cereal yield improvements and the consequences for countries' processes of structural change. The results suggest a clear role for fertilizer, modern seeds and water in boosting yields. We then test for respective empirical links between agricultural yields and economic growth, labor share in agriculture and non-agricultural value added per worker. The identification strategy includes a novel instrumental variable that exploits the unique economic geography of fertilizer production and transport costs to countries' agricultural heartlands. We estimate that a half ton increase in staple yields generates a 14 to 19 percent higher GDP per capita and a 4.6 to 5.6 percentage point lower labor share in agriculture five years later. The results suggest a strong role for agricultural productivity as a driver of structural change.
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Metadata
- Authors
- McArthur, J. W., & McCord, G. C.
- Affiliations
- Brookings Institution (US)
- University of California San Diego (US)
- Corresponding author
- McCord, Gordon C.
- Venue
- Journal of Development Economics
- Publisher
- Elsevier BV
- Published
- 2017-07
- Volume
- 127
- Pages
- 133-152
- ISSN
- 0304-3878 (ISSN-L)
- PMC
- PMC5726111
- OpenAlex
- W3124982061
- Cited by
- 391
- References
- 85
- Citations by year
- 2026: 37 · 2025: 47 · 2024: 61 · 2023: 52 · 2022: 47 · 2021: 45 · 2020: 58 · 2019: 18 · 2018: 14 · 2017: 9
- FWCI
- 48.73
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Locations
- Journal of Development Economics (publishedVersion, cc-by)
- SSRN Electronic Journal (acceptedVersion)
- Europe PMC (PubMed Central) (publishedVersion, cc-by)
- PubMed Central (publishedVersion, cc-by)
- PubMed (publishedVersion)
- eScholarship (California Digital Library) (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Bill & Melinda Gates Foundation (OPP44755 and OPP1083277)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
- Life Sciences › Agricultural and Biological Sciences › General Agricultural and Biological Sciences › Agricultural Economics and Practices
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Agricultural economics and policies
- Keywords
- agricultural inputs, fertilizers, irrigation, cereal yield, agricultural productivity, economic growth, structural change, instrumental variables, GDP per capita
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