We examine how resource allocation across production units shapes technology adoption and productivity growth, combining a unique panel dataset of the universe of Canadian farms spanning 1986 to 2006 with a quantitative model of heterogeneous producers. The period features the advent and rapid di!usion of a major new seeding technique, zero tillage, whose use expanded from zero percent of cultivated land in 1986 to 60 percent by 2006. We document substantial technology adoption, land consolidation, and productivity growth, facilitated by an economic environment characterized by relatively high allocative e”ciency, whereby more productive farms operate at a larger scale. Empirically, we find that adopting zero-tillage raises farm-level productivity substantially. Through quantitative analysis, we estimate that zero-tillage adoption accounts for roughly 30 percent of the near doubling of agricultural productivity over the period and 45–70 percent of the observed structural transformation. We show that high allocative e”ciency was crucial for the widespread adoption of technology, which would have nearly disappeared with correlated distortions commonly documented in developing countries. We also show that technological progress can be a powerful driver of catch-up growth in developing economies with low correlated distortions.