Access to markets and technology adoption in the agricultural sector: Evidence from Brazil

This paper studies how improved market access through infrastructure influences agricultural modernization. We focus on Brazil’s federal highway expansion from 1950 to 2000 and its impact on the adoption of new agricultural technologies. To address endogeneity, we exploit the construction of Brasília and the plan to connect it with all state capitals as a natural experiment. Using least-cost paths between Brasília and each capital, we build a predicted highway network to instrument for market access. The results show that increased market access led to greater use of modern inputs-such as fertilizers and pesticides-and higher agricultural productivity and wages. However, these gains are uneven: municipalities in the Northeast benefited less, and in some cases, not at all. To explain this heterogeneity, we develop a stylized model in which high input costs in certain regions dampen the incentives to upgrade technology, even with better market access. Historical evidence from Brazil’s import-substitution industrialization period supports this mechanism. These findings suggest that while infrastructure can boost development, its effectiveness depends on complementary regional conditions.

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Publication Details

Journal
Transportation Research Part A Policy and Practice
Published
2025-11-20
DOI
https://doi.org/10.1016/j.tra.2025.104786
Primary Topic
Logistics and Infrastructure Analysis
Type
article
Field-Weighted Citation Impact
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article

Access to markets and technology adoption in the agricultural sector: Evidence from Brazil

Diego Astorga-Rojas
Transportation Research Part A Policy and Practice
Logistics and Infrastructure Analysis
article

Access to markets and technology adoption in the agricultural sector: Evidence from Brazil

Diego Astorga-Rojas
article en

Abstract

This paper studies how improved market access through infrastructure influences agricultural modernization. We focus on Brazil’s federal highway expansion from 1950 to 2000 and its impact on the adoption of new agricultural technologies. To address endogeneity, we exploit the construction of Brasília and the plan to connect it with all state capitals as a natural experiment. Using least-cost paths between Brasília and each capital, we build a predicted highway network to instrument for market access. The results show that increased market access led to greater use of modern inputs-such as fertilizers and pesticides-and higher agricultural productivity and wages. However, these gains are uneven: municipalities in the Northeast benefited less, and in some cases, not at all. To explain this heterogeneity, we develop a stylized model in which high input costs in certain regions dampen the incentives to upgrade technology, even with better market access. Historical evidence from Brazil’s import-substitution industrialization period supports this mechanism. These findings suggest that while infrastructure can boost development, its effectiveness depends on complementary regional conditions.

Transportation Research Part A Policy and PracticeVol. 204
Pontificia Universidad Javeriana (CO)
Openalex Percentile: Top 60%
Logistics and Infrastructure Analysis
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