Farm diversification efforts, (open) innovation networks and performance: what is the connection?

Abstract

PurposeBased on farm diversification's conventional and unconventional nature, the study intends to discriminate different profiles of farm diversification businesses. Furthermore, this study analyses the links between farm diversification efforts, (open) innovation networks as well as the environmental performance (EP) and financial performance (FP) of farms.Design/methodology/approachA questionnaire was administered through personal interviews with 160 fresh fruit farmers in an inland Portuguese region. Linear regression, latent class analysis (LCA) and multinomial logistic regression were used.FindingsThere are significant differences between the levels of diversification, performance and participation in (open) innovation networks of the three classes of farmers discriminated. Different types of diversification efforts and (open) innovation networks influence EP and FP, while FP and R&D projects are associated with the likelihood of being part of a farm diversification class. Moreover, this study shows that innovation networks, promoted by specialized agricultural advisors and R&D projects, are important forms of open innovation in the agricultural sector.Research limitations/implicationsThe study contributes to understanding the agricultural sector's diversification efforts and (open) innovation networks and their association with EP and FP. The conventional or unconventional nature of farm diversification was self-reported.Practical implicationsEuropean and local institutions are advised to develop more R&D programs directed to farmers, including environmental and financial issues, besides comprising agricultural and non-agricultural diversification.Originality/valueThis study provides new insights to understand the association between diversification efforts, (open) innovation networks and agricultural businesses' performance.