Members' satisfaction with agricultural cooperatives. An explanation from Property Rights Theory

Journal ar
ITEA Informacion Tecnica Economica Agraria
  • Volumen: 109
  • Número: 4
  • Fecha: 01 December 2013
  • Páginas: 443-457
  • ISSN: 16996887
  • Source Type: Journal
  • DOI: 10.12706/itea.2013.027
  • Document Type: Article
The property rights theory is useful to understand the factors that influence members' satisfaction with the cooperative and thus the survival and success of these firms. This theory reveals relevant differences between cooperatives and capitalist firms on how members exert their property rights. Thus, in cooperative, members exert their rights basing on their co-operativised activity. In addition, cooperatives have limitations to transfer rights, affecting to whom they can be transferred and the value assigned. These peculiarities relative to property rights drive to some inefficiencies such as free-rider, time horizon and risk. The most important consequence of these problems is that it discourages members' investments and hinders the growth and the survival of the cooperative. The result of the empirical analysis, based on personal surveys to 277 agricultural cooperative members, confirm that to the extent free-rider, time horizon and risk are reduced, the satisfaction of cooperative members with their cooperative increases. Hence, the importance that cooperative managers introduce proper mechanisms to reduce costs associated to property rights.

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