Is Innovation a Driver of Agricultural Sustainability? Evidence from Eastern European Countries Under the SDG 2 Framework

Innovation is central to the Zero Hunger agenda, yet its distributional links to agricultural performance and policy in Eastern Europe remain unclear. This study investigates whether national innovation performance, proxied by the Global Innovation Index, is associated with agriculture’s macroeconomic weight and with public budget orientation in Bulgaria, Czechia, Hungary, Poland, Romania, and Slovakia across the past decade and a half. Using panel quantile regression with country fixed effects and bootstrapped standard errors, we estimate effects at the lower, median, and upper parts of the outcome distributions for three indicators: agriculture value added share of gross domestic product, the agriculture orientation index for government expenditures, and the agriculture share of government expenditure. Results show a robust negative association between innovation and the agricultural share of gross domestic product that strengthens toward the upper quantiles, consistent with structural transformation that reallocates value added toward higher-productivity sectors. For the orientation index, innovation is unrelated at the lower and median parts but becomes positive in mid–upper regimes, fading again at the extreme upper tail. No systematic relationship emerges for the budget share. Land endowment is positively associated with agricultural weight, while population size is negatively associated. We conclude that economy-wide innovation aligns with structural change, whereas shifting agricultural budget shares requires targeted, sector-specific policy instruments.