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The Impact of Investment Activity on Economic Growth in Agricultural Holdings in Bulgaria by Specialisation

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  • Kirechev Damyan

    (University of economics - Varna, Varna, Bulgaria)

Abstract

Since Bulgaria joined the European Union (EU), the country’s farms have undergone significant changes: the number of farms is decreasing, their size is increasing, and the level of public support is also increasing. Total production by the agricultural sector is changing in different proportions. As a result of public support, investment activity on farms increases significantly, which is a crucial factor in the economic growth of farms. However, the dynamics of investment activity vary from farm to farm, depending on their specialisation. This paper aims to analyse how changes in farm investment activity by specialisation affect the generation of total output growth and farm economic size. The analysis is based on data from the 2007-2022 Farm Accounting Data Network across eight farm types by specialisation. The methodology involves measuring the composition, structure, and dynamics of farm assets, as well as the dynamics of gross investment, and assessing the impact of investment on total farm output and net income generation. Statistical methods, structural analysis, and dependency analysis are used to analyse the dynamics of the indicators. The main results show differences in the changes of indicators across sub-sectors. On average, Bulgarian farms saw a 8-fold increase in gross investment, compared to a 3.3-fold increase in the EU average. In the asset structure, fixed assets predominate in the Wine, Permanent crops, Horticulture, Dairy, and Other grazing livestock sectors. A higher correlation exists between gross fixed asset investment and gross output in the livestock subsectors, while a lower correlation is observed in the crop subsectors. The analysis can target farm investment activity by specialisation and improve public support for fixed asset investment by the agricultural subsector. In the transition toward greater farm sustainability, investment direction will be crucial to enhancing farm sustainability and competitiveness.

Suggested Citation

  • Kirechev Damyan, 2025. "The Impact of Investment Activity on Economic Growth in Agricultural Holdings in Bulgaria by Specialisation," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 19(1), pages 1013-1026.
    • Handle: RePEc:vrs:poicbe:v:19:y:2025:i:1:p:1013-1026:n:1010
    DOI: 10.2478/picbe-2025-0080
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    References listed on IDEAS

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    1. Bachev, Hrabrin, 2023. "Comparative and absolute competitiveness of governing structures in Bulgarian farming," MPRA Paper 118687, University Library of Munich, Germany.
    2. Tom Hertz, 2009. "The effect of nonfarm income on investment in Bulgarian family farming," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 161-176, March.
    3. Hrabrin Bachev, 2023. "Competitiveness of Farming Structures in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 108-131.
    4. Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2024. "The Impact of Agricultural Investments on the Economic Efficiency of Production Factors: An Empirical Study of the Wielkopolska Voivodeship," Agriculture, MDPI, vol. 14(12), pages 1-16, December.
    5. Elżbieta Jadwiga Szymańska & Mariusz Dziwulski & Michał Kruszyński, 2021. "Determinants of Fixed Asset Investment in the Polish Farms," Sustainability, MDPI, vol. 13(24), pages 1-13, December.
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