Technological Innovations in Agricultural Firms in Bulgaria: What is the Role of EU Funds?

Abstract The value chains that originate from agricultural production across the globe are of critical importance to achieving the Sustainable Development Goals. In the context of Bulgaria on the country level, the gross capital formation of agricutural firms has experienced an incredible increase of 95% because of buying machines and equioments during the years 2018 and 2022. Our research project focuses on analyzing the effects of governmental financial support on the growth and competitiveness of agricultural companies. For the study, data on firms that were financially aided to buy agricultural machinery between 2021 and 2023 was derived from the eufund.bg database. It was discovered that medium and large businesses are two to three times more likely to receive funding from the EU compared to the micro-enterprises. The study identified a significant North-South divide signaling a positive impact of funding to the less developed regions and in particular the Northwest region. Furthermore, the crucial role of the EU funding in enhancing the growth of the agricultural sector are emphasized by the study. The study identifies gaps in the efficacy of support programs and policy interventions in enhancing innovations in the agricultural sector. The study also offers insights on specific impacts on farm productivity, profitability, environmental sustainability, and socio-economic implications for the future studies.