Genetically modified organisms and agricultural productivity: evidence from OECD developed economies

Abstract

How biotechnological innovations connect with aggregate productivity growth in agriculture amid a changing climate remains a critical question. This paper examines the aggregate effects of genetically modified and gene-edited organisms (GMOs) using a novel dataset of harmonized agricultural production accounts for 15 OECD countries over 1973–2016. To identify causal effects, we employ a staggered difference-in-differences design that exploits exogenous cross-regional variation in crop-specific agro-climatic suitability combined with temporal variation in new patent registrations. Our results show that GMO adoption has a negligible impact on aggregate agricultural total factor productivity (TFP). Instead, the primary channel operates through a substantial reduction in the productivity of capital deepening for labour productivity growth. Although these findings pertain specifically to high-income, capital-intensive agricultural systems, their implications for developing economies are equally clear: because GMO adoption does not raise aggregate TFP in advanced economies, it is unlikely to serve as a mechanism for closing the large cross-country agricultural productivity gaps documented in the development-accounting literature.