Digitalization and financial performance of enterprises from the livestock sector

Abstract

The European Union’s strategy for the digitalization of agriculture is reflected in several initiatives, programs, and projects. The effect of promoting the application of digital technologies is expected to result in an increase in the competitiveness of farmers and their entry into the world market. This is expected to be done through the introduction of innovations leading to cost optimization and greater efficiency. The article examines some concepts related to digitalization, such as “digital maturity”, “digital transformation”, “digital intelligence” and others. A Probit model is used to study the relation of digitalization and the firm performance of entrepreneurs in the livestock sector. Based on an empirical study of the livestock farms, the relationship between digitalization and financial results, sales revenue, size, and innovation activity is analyzed. Our findings show that as the return on assets increases, the probability of livestock farms implementing digital solutions increases. A negative relationship between the intensity of innovation spending and the propensity for digitalization is proved. As the size of their assets increases, companies are more likely to implement digital solutions.