Abstract
The purpose of this investigation was to analyze the effect of financial structure and fruit-fly control on the development of Small and Medium Enterprises (SMEs) of citrus in the Central Jungle of Peru. Using a quantitative design and a balanced sample of 54 observations, the analysis estimates complementary linear models with interaction terms and restricted cubic spline specifications to capture direct, synergistic, and nonlinear effects. The results of the baseline estimate show that both financial structure and control of fruit flies have a positive and significant impact on the business growth of SMEs of citrus. Additionally, the interaction between financial structure and phytosanitary control is also positive and significant. This means that the return to better financing is greater when there is stronger phytosanitary management, in addition to the fact that effective pest control is more productive when there are stable and diversified financial resources. The flexible spline estimates of the equations also show that the relationships between the variables under study are not constant along the space of the variables. While certain characteristics of citrus enterprises remain invariant, others change as enterprises ascend the financial and technology gradient. Future sustainable growth of citrus SMEs will depend upon enhanced rural finance and phytosanitary capabilities currently lacking in many countries. An empirical analysis based on an integrated conceptual framework that draws together crop protection, rural finance and managerial capability is developed to elucidate the impact of these factors on farm and enterprise performance within the agricultural development context.