2021
DOI: 10.1111/1477-9552.12475
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Do quality incentive payments improve cooperative performance? The case of small French agricultural cooperatives

Abstract: Small agricultural cooperatives are increasingly using differentiated payments based on the quality of their members’ products. Such cooperatives make a trade‐off between the return on investment in quality and members’ disengagement from the cooperative. Based on data from the five‐year survey of small French agricultural cooperatives, we analyse the effect of incentive payments on small cooperatives’ performances. We investigate how incentive payments can reduce the problem of free riders and improve these c… Show more

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Cited by 7 publications
(3 citation statements)
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“…Our results suggest a conclusion similar to the latter, possibly as a result of the common practice in the area to pay for members’ grapes according to their quality. Payment by quality has been shown to increase small cooperatives’ performances (Barry and Rousselière, 2022). Also, the obligation of cooperative members to deliver their whole production to the cooperative prevents free-riding practices like selling the best grapes on the market and delivering low-quality ones to the cooperative.…”
Section: Discussionmentioning
confidence: 99%
“…Our results suggest a conclusion similar to the latter, possibly as a result of the common practice in the area to pay for members’ grapes according to their quality. Payment by quality has been shown to increase small cooperatives’ performances (Barry and Rousselière, 2022). Also, the obligation of cooperative members to deliver their whole production to the cooperative prevents free-riding practices like selling the best grapes on the market and delivering low-quality ones to the cooperative.…”
Section: Discussionmentioning
confidence: 99%
“…Revenue is frequently used as an indicator of the financial performance of farmer cooperatives (e.g. Soboh et al., 2012; Benos et al., 2016; Grashuis, 2019; 2020; Barry and Rousselière, 2021; Sebhatu et al., 2021). Because we deal with financial time series data, we first normalize the revenue variable in order to account for the effect of inflation.…”
Section: Methodsmentioning
confidence: 99%
“…Revenue is often used as an indicator of the financial performance of cooperatives (e.g. Soboh et al., 2012; Benos et al., 2016; Grashuis, 2019; 2020; Barry and Rousseliere, 2021; Sebhatu et al., 2021). The truncated model, which is only estimated for the sub‐sample of cooperatives which cleared the first hurdle (i.e.…”
Section: Methodsmentioning
confidence: 99%