PROFITABILITY DETERMINANTS OF AGRICULTURAL ENTERPRISES: EMPIRICAL EVIDENCE FROM RURAL ECONOMIES

Ivana Miklošević; Andreja Katolik Kovačević; Anica  Vukašinović

doi:10.59267/ekoPolj2603765M

Authors

Ivana Miklošević University of Slavonski Brod, 108th Brigade ZNG Street No. 36, 35000 Slavonski Brod, Croatia https://orcid.org/0000-0002-5882-6409
Andreja Katolik Kovačević University of Slavonski Brod, 108th Brigade ZNG Street No. 36, 35000 Slavonski Brod, Croatia https://orcid.org/0000-0002-8985-0903
Anica Vukašinović Head of the Department for Education, Sport and Culture, Brod-Posavina County, Petra Krešimira IV Street No. 1, 35000 Slavonski Brod, Croatia https://orcid.org/0009-0006-4263-3545

DOI:

https://doi.org/10.59267/ekoPolj2603765M

Keywords:

profitability, agriculture, correlation, panel data analysis, rural economies

Abstract

This study investigates the profitability determinants ofagricultural firms in rural economies and has focused onfive Eastern European countries for time period spanningfrom 2005–2023. The aim of research is to evaluate the keystructural, economic and technological factors that influenceand effect the performance of agricultural enterprises. Themethodology focuses on panel data analysis by employingfixed effects regression, stationarity analysis, examiningcorrelation analysis and performing diagnostic tests forvalidity. The findings suggest that farm size, agriculturalinvestment, exports and use of fertiliser influence profitabilitypositively and significantly whereas labour employed inagriculture enterprises showcase a negative linkage indicatingefficiency concerns. The results suggest that structuraldevelopment, integration of markets and advancement intechnology are crucial for enhancing agricultural performance.The study concludes that policy makers should promote landconsolidation, investment support, export facilitation toenhance profitability in rural agricultural economies.

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