Digitalization, green transformation, and agricultural productivity in transition economies: Panel evidence with illustrative insights for Moldova and Armenia
Type of the article: Research ArticleAbstractThis study analyzes the impact of digitalization, green transformation, financial access, and institutional support on agricultural labor productivity in transition economies of Eastern Europe and the Caucasus. Panel data for six countries (2000–2024) were examined using fixed and random effects models, with robustness checks using the Driscoll–Kraay estimator. Results show that digitalization and financial access consistently enhance productivity at the panel level (0.141; p < 0.01), while institutional factors do not show a consistent direct effect once temporal trends are removed (0.050, p > 0.05), though they may strengthen resilience indirectly. In contrast, the Green Index exerts a significant negative effect (–1.848; p < 0.01), reflecting substantial transitional costs of ecological modernization. Country fixed effects reveal heterogeneity: Moldova (+0.1106) shows the highest positive deviation, while Armenia (–0.0365), Azerbaijan (–0.0749), and Kazakhstan (–0.0382) exhibit negative deviations. Ukraine (+0.0176) and Georgia (+0.0028) remain close to the panel mean. Country specific regressions reveal both commonalities and divergences. In Moldova, institutional quality (0.265, p < 0.001), digitalization (0.033, p = 0.026), and green practices (–0.462, p < 0.001) significantly shape productivity, while finance is excluded. In Armenia, institutional quality (0.469, p = 0.001) and green practices (–0.502, p = 0.001) remain significant, but finance enters negatively (–0.855, p = 0.050), and digitalization is excluded. Digitalization and finance are immediate productivity enhancers at the regional level, but their role varies by country. Ecological modernization imposes short term costs and requires compensatory policies.AcknowledgmentsThe authors acknowledge the financial support received for the implementation of the project “Accelerating the Digital and Green Transformation of Agri-Food SMEs in Moldova and Armenia”, funded by the National Agency for Research and Development of the Republic of Moldova (NARD) (Project No. 26.80013.0807.05ARM) and the Higher Education and Science Committee of the Ministry of Education, Science, Culture and Sports of the Republic of Armenia (Project No. 26NARD-1D007).