INVESTMENT AND PRODUCTIVITY IN THE AGRO-INDUSTRIAL SECTOR: A CASE STUDY

Abstract

The productivity of a sector, an important determinant of competitiveness, depends, among other factors, on the investment made. In this context, the main aim of this work is to explore the relation between investment and productivity trends, based on the amounts of investment made in the agri-food industry in Northern Portugal (NUT II), as well as the asymmetries at sub-regional level, during the last two EU support frameworks, namely QREN (2007-13) and Portugal 2020 (2014-2020). This study will start by gathering information from organizations that manage EU funds related to the beverage and food industries. This data will be categorized by subsectors and regions to estimate access. The research will then analyse productivity trends in these sectors and the impact of investment on productivity using statistical analysis techniques. The results show that there is a positive and significant relation between gross fixed capital formation and the productivity of both industries: food and beverage. In what refers, specifically to the beverage industry, we obtain significant results in the elasticity model. The findings show that it possible to gauge the effectiveness of policies to support investment, namely by identifying the most dynamic sectors in terms of attracting funds and with the greatest impact in terms of productivity, i.e. assessing the return on investment that is essentially private and supported with public funds, as well as identifying strategic sectors and promoting transparency and accountability in the management of public resources.