Soil fertility, financial support, and sustainable competitiveness: evidence from Ukraine

Purpose. The purpose of this paper was to highlight the results of the study of the influence of the soil fertility and financial support on the formation of sustainable competitiveness of Ukrainian agricultural enterprises. Methodology / approach. To achieve the purpose, we used such methods: correlation analysis (to identify and assess the close relationship between the ecological-agrochemical assessment of soils, financial support per hectare, and the sustainable competitiveness); econometric modeling (to develop a mathematical model of the dependence of the subindex of competitiveness by the yield on the ecological-agrochemical assessment of soils and the financial support per hectare); economic-statistical and monographic (for the assessment and analysis of the influence of the ecological-agrochemical assessment of soils and financial support per hectare on the formation of sustainable competitiveness); abstract-and-logical (for generalization and analysis of the research results); graphical (for the visual representation of the revealed dependencies). The study was performed on a selected sample of agricultural enterprises of districts of Kharkiv, Volyn and Chernihiv region, which represent all the soil-climatic zones of Ukraine. The time range of this research covers the years 2010–2016. The database of the 189 observations in Kharkiv region, 93 – in Volyn region and 88 – in Chernihiv region was as the empirical basis. Results. This paper presents empirical evidence for the impact of the soil fertility and financial support on the formation of sustainable competitiveness of enterprises. The obtained results prove the hypothesis of a positive relationship between the ecological-agrochemical assessment of soils, financial support per hectare, and the sustainable competitiveness of subjects, however, the level of impact of soil fertility differs significantly in different soil-climatic conditions. It is shown that soil fertility and financial support can sometimes act as substitutes, for example, in a zone of insufficient moisture or low soil fertility. Increasing the financial support for agricultural production per hectare may be a strategy to increase productivity when soils are less fertile. Originality / scientific novelty. For the first time, one- and two-factor linear and quadratic econometric models were developed, which made it possible to carry out quantitative assessment of the impact of the ecological-agrochemical assessment of soils and the financial support per hectare on the formation of the subindex of competitiveness by the yield in various soil-climatic zones of Ukraine. The provision on the formation of the subindex of competitiveness by the yield under the conditions of the economic law of diminishing returns, was further developed. Practical value / implications. The main results of the study can be used for (i) estimation and forecasting of the level of competitiveness depending on the ecological-agrochemical assessment of soils and the financial support per hectare; (ii) determining the effect of measures to improve the soil fertility on the competitiveness; (iii) determining the impact of soil degradation on competitiveness of agribusiness entities; (iv) identification of reserves to improve competitiveness.