Innovation and Productivity in Agricultural Firms (Working Document 13)



The literature on the links between innovation and productivity at firm level in agriculture is almost inexistent. In this paper, Aboal, Mondelli and Vaira analyze the factors behind the innovation effort of farms and the impact that innovation effort has on farm’s productivity, exploiting a unique farm-level agricultural innovation survey carry out in Uruguay. 

For this purpose, the authors use the first agricultural innovation survey in the world that is based on the well-known Oslo Manual and covering farm activities that account for more than 90% of the agricultural GDP of a country.

In this sense, this working paper contributes on several ways to the literature. First, it brings new evidence to understand the drivers of productivity in agriculture and, specifically, the effect of innovation on productivity at the farm level. Second, it generates evidence to understand the main factors behind innovation in agriculture at farm level. This analysis is novel because it allows comparing the potential determinants of innovative efforts and the effects of innovative efforts on productivity in different industries in the agricultural sector—oilseed and grain (non-irrigated), dairy, beef cattle and sheep, and irrigated rice farming.

The results indicate that farm size, cooperation with other agents to perform Research and Development (R&D), the education of the owner of the farm, the participation of foreign capital and the existence of links with other organizations, in particular scientific, horizontal and vertical ones, are positively correlated with innovation effort. Public and private financial support are not clearly linked with innovation effort. The innovation effort has a positive effect on farm’s productivity. Some heterogeneities across industries are found.

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Documento de Trabajo 13