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張庭源, 楊宗翰

Transportation Networks, Technology Adoption, and Structural Transformation (forthcoming in Journal of International Economics)

We investigate how transportation networks influence agricultural technology adoption and structural transformation. Our empirical results show that improved transport networks lower non-labor input prices relative to wages and promote the adoption of labor-saving technologies. These changes increase labor productivity and facilitate structural transformation. In our calibrated model, transportation improvements alone account for a 2.2-2.5 percentage-point decline in India's agricultural employment share, representing approximately 16-18 percent of the total decline observed in the data. A counterfactual exercise in which farmers cannot choose their technology results in a smaller structural transformation, highlighting the role of farmers' adoption decision in the process of structural transformation.