Non-financial factors affecting livestock farm’s performance in meat supply chain

Abstract

This article investigates non-financial factors affecting performance of livestock farms in the meat supply chain in Albania. A structured questionnaire was developed to collect data in three main regions of Albania (Tirana, Korça and Lushnje). Confirmatory factor analysis is used to develop measures for the non-financial factors (i.e. trust, contracts, opportunistic behavior, information sharing and information quality) and Structural Equation Modelling is employed to test study hypotheses. The result shows that trust is positively associated with farm’s performance. On the other hand, communication (i.e. resulting from the merge of information sharing and information quality) is negatively associated with performance. However, communication appears to have a positive association with farm’s performance indirectly through its effect on trust. Thus, it can be deducted that communication builds trust and trading relationship based on trust show higher levels of farm’s performance. Lastly, contracts and opportunistic behavior do not show any significant association with farm’s performance.