Innovation and Cooperation in Agri-Food Value Chains in Latin American Developing Countries: Exploring the Role of Proximity Theory from Economic Geography

Innovation is an important strategy for enhancing the competitiveness and sustainability of agri-food value chains, especially in developing countries where it significantly contributes to rural development.Innovation is increasingly viewed as a cooperative process involving various actors.However, few studies examine cooperation within extended agri-food value chains, which include both the actors within the chains and supporting organizations.Therefore, this study explores and compares cooperation for innovation among actors in two extended value chains: one in Nicaragua (dairy milk) and another in Paraguay (corn), using proximity theory, which considers non-spatial dimensions such as institutional, cognitive, social, and organizational factors.Additionally, a method for measuring personal proximity is proposed.Data from 157 participants across the two chains are analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).The results highlight the significant roles of social and institutional proximities in promoting cooperation and demonstrate how such collaboration accelerates innovation.The study discusses both theoretical and practical implications.