Essays on technological progress and externalities

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Mata, Daniel da
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My dissertation assesses the impacts of innovation on externalities. To shed light on this complex issue, I examine the swift adoption of genetically engineered soybean seeds in Brazil during the 2000s, employing a Dynamic Difference-in-Differences framework. It is worth noting that the soybean seed technology enhances productivity and reduces labor usage. In the first chapter, I explore the influence of this technological progress on greenhouse gas emissions, a global externality. My findings point out that producers in Brazilian regions with high suitability for genetically engineered seeds enhance their crop output by transitioning away from higher-emission activities, such as livestock breeding. Importantly, this increase in crop output does not coincide with deforestation or fires, two significant contributors to greenhouse gas emissions. In addition, my results indicate that the agricultural sector decreases its carbon footprint. In the second chapter, I analyze the hidden impacts of technological change on violence, a local externality. I show that municipalities with greater exposure to soybean seed technology experienced a higher death toll, mainly among men and non-white individuals. The primary driver of the surge in violence is unemployment among low-skilled individuals, with long-term effects on their employment prospects. I rule out alternative explanations such as rural violence, urbanization, migration, worsening housing conditions, and mental health (proxied by suicide rate). My findings highlight that innovation in Developing countries may have both positive and negative unintended consequences.

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