Organic Certification and the Financial Performance of Beef Cattle Farms: Evidence From Spain

Abstract

The environmental and health impacts of beef cattle farms (BCFs) have intensified the pressure to adopt organic production and related practices. Beyond regulatory compliance, organic certification is assumed to create competitive advantages by enhancing consumers' green image, fostering sustainable asset management and promoting employees' operational efficiency. This study examines whether these potential advantages translate into higher financial performance. Panel data for Spanish BCFs from 2012 to 2022 are analysed using a correlated random effects (CRE–Mundlak) model with year fixed effects to compare certified and noncertified farms. The results show no evidence of a systematic profitability advantage associated with certification through consumers' green image. In contrast, organic certification strengthens the positive association between employees' operational efficiency and profitability, while making the effect of sustainable asset management negative, suggesting that compliance costs may outweigh short-term gains. Overall, the findings indicate that organic certification does not automatically deliver competitive advantages, underscoring the need for supportive policies and complementary business strategies to ensure economic viability.