The Effect of Financial and Non-financial Factors on the Productivity and Profitability of the Goat Industry: A Modelling Approach to Structural Equations

Goat farming is an important production sector of Greece, as it contributes to the family economy in rural areas. Despite the importance of the goat industry, this sector has experienced economic difficulties due to poor management and increased production costs; as a result, the sector presents reduced efficiency and low competitiveness. This study investigates the factors affecting the inter-organizational relationships in the goat industry in Greece and assesses the influence that the financial and non-financial factors have on the financial performance of these firms. To identify the factors determining farmers’ economic performance, a structural equation model was used. Research hypotheses describe the effects between inter-organizational relationships in correlation to gross revenue. The model hypothesizes that gross revenue is predicted by labour in hours, loans, feed in kg, fixed capital expenditures, education level and the age of the farmers. Data were gathered from a questionnaire administered via a direct survey to goat farmers in the Greek regions of Thessaloniki and Larisa. The sample consisted of 272 farms and the survey took place during 2020. Results point out the direct and indirect contributions that these factors have on gross revenue, and by extension, to the productivity and profitability of the goat industry.