IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v95y2024i1p113-127.html
   My bibliography  Save this article

The commercial growth of farmer cooperatives in Romania: A double‐hurdle model analysis

Author

Listed:
  • Jasper Grashuis
  • Florentin Bercu
  • Andrei‐Mirel Florea
  • Riana Iren Radu

Abstract

In many countries, farmer cooperatives have been successful at facilitating access to markets in conditions of imperfect competition for a long time. However, modern farmer cooperatives have only been operational in Romania since 2005, and their development is slowed by several internal and external conditions. In the absence of empirical evidence of possible explanations for alleged shortcomings in the growth of farmer cooperatives in Romania, applied research is necessary to inform recommendations for practitioners, policymakers, and other stakeholders. Using financial data from 1,426 farmer cooperatives in Romania for the 2017–21 period, we estimate a double hurdle panel model of the probability and the intensity commercial activity with annual revenue as the variable of interest. All else equal, annual revenue increased in 2020 and 2021 relative to 2017, which to some extent refutes observations of underdevelopment. Although the membership size of farmer cooperatives in Romania is relatively small, its relationship to the probability and the intensity of commercial activity is positive. The relationship of age to the probability and the intensity of commercial activity is ∩‐shaped, which may imply a relatively short lifespan for farmer cooperatives in Romania. Possible explanations are member opportunism and double taxation misunderstandings, but further research is necessary to generate more insights.

Suggested Citation

  • Jasper Grashuis & Florentin Bercu & Andrei‐Mirel Florea & Riana Iren Radu, 2024. "The commercial growth of farmer cooperatives in Romania: A double‐hurdle model analysis," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 113-127, March.
    • Handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:113-127
    DOI: 10.1111/apce.12459
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/apce.12459
    Download Restriction: no
    File URL: https://libkey.io/10.1111/apce.12459?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:annpce:v:85:y:2014:i:4:p:683-684 is not listed on IDEAS
    2. Monica Laura Zlati & Andrei Mirel Florea & Valentin Marian Antohi & Marius Sorin Dinca & Florentin Bercu & Costinela Fortea & Stanciu Silvius, 2023. "Financing Romanian Agricultural Cooperatives’ Investments for the 2023–2027 Horizon," Sustainability, MDPI, vol. 15(3), pages 1-28, January.
    3. Jo Thori Lind & Halvor Mehlum, 2010. "With or Without U? The Appropriate Test for a U‐Shaped Relationship," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(1), pages 109-118, February.
    4. Rafat Soboh & Alfons Oude Lansink & Gert Van Dijk, 2012. "Efficiency of Cooperatives and Investor Owned Firms Revisited," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 142-157, February.
    5. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    6. Sebhatu, Kifle T. & Gezahegn, Tafesse W. & Berhanu, Tekeste & Maertens, Miet & Passel, Steven Van & D'Haese, Marijke, 2021. "Exploring variability across cooperatives: economic performance of agricultural cooperatives in northern Ethiopia," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(3), March.
    7. Jasper GRASHUIS, 2020. "Returns To Debt And Equity In Farm Producer Organizations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(1), pages 55-69, March.
    8. Martin Paul & Kai Mausch & Tesfaye B Woldeyohanes & Thomas Heckelei, 2022. "Three hurdles towards commercialisation: integrating subsistence chickpea producers in the market economy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(3), pages 668-695.
    9. Jasper Grashuis, 2019. "The impact of brand equity on the financial performance of marketing cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 35(2), pages 234-248, April.
    10. Qiao Liang & Rongrong Bai & Zhi Jin & Linlin Fu, 2023. "Big and strong or small and beautiful: Effects of organization size on the performance of farmer cooperatives in China," Agribusiness, John Wiley & Sons, Ltd., vol. 39(1), pages 196-213, January.
    11. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    12. Peter Helmberger & Sidney Hoos, 1962. "Cooperative Enterprise and Organization Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(2), pages 275-290.
    13. Francisco J. Beltrán Tapia, 2012. "Commons, social capital, and the emergence of agricultural cooperatives in early twentieth century Spain," European Review of Economic History, European Historical Economics Society, vol. 16(4), pages 511-528, November.
    14. Wolz, Axel & Möllers, Judith & Micu, Marius Mihai, 2020. "Options for agricultural service cooperatives in a postsocialist economy: Evidence from Romania," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 49(1), pages 57-65.
    15. Aleksandra Chlebicka & Michał Pietrzak, 2018. "Size of Membership and Survival Patterns of Producers’ Organizations in Agriculture—Social Aspects Based on Evidence from Poland," Sustainability, MDPI, vol. 10(7), pages 1-24, July.
    16. Andrei-Mirel Florea & Florentin Bercu & Riana Iren Radu & Silvius Stanciu, 2019. "A Fuzzy Set Qualitative Comparative Analysis (fsQCA) of the Agricultural Cooperatives from South East Region of Romania," Sustainability, MDPI, vol. 11(21), pages 1-18, October.
    17. Feng Zhang & Chung L. Huang & Biing-Hwan Lin & James E. Epperson, 2008. "Modeling fresh organic produce consumption with scanner data: a generalized double hurdle model approach," Agribusiness, John Wiley & Sons, Ltd., vol. 24(4), pages 510-522.
    18. Jos Bijman & Constantine Iliopoulos, 2014. "Farmers' Cooperatives in the Eu: Policies, Strategies, and Organization," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(4), pages 497-508, December.
    19. Alex Coad & Jacob Rubæk Holm & Jackie Krafft & Francesco Quatraro, 2018. "Firm age and performance," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 1-11, January.
    20. Theodoros Skevas & Ray Massey & Jasper Grashuis, 2022. "Farmer adoption and intensity of use of extreme weather adaptation and mitigation strategies: evidence from a sample of Missouri farmers," Climatic Change, Springer, vol. 174(1), pages 1-23, September.
    21. Theodoros Skevas & Ray Massey & Jasper Grashuis, 2022. "Correction to: Farmer adoption and intensity of use of extreme weather adaptation and mitigation strategies: evidence from a sample of Missouri farmers," Climatic Change, Springer, vol. 174(3), pages 1-1, October.
    22. Theo Benos & Nikos Kalogeras & Frans J.H.M. Verhees & Panagiota Sergaki & Joost M.E. Pennings, 2016. "Cooperatives’ Organizational Restructuring, Strategic Attributes, and Performance: The Case of Agribusiness Cooperatives in Greece," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 127-150, January.
    23. Bond, Jennifer Keeling, 2009. "Cooperative Financial Performance and Board of Director Characteristics: A Quantitative Investigation," Journal of Cooperatives, NCERA-210, vol. 22, pages 1-25.
    24. Krishna Prasad Pokharel & Madhav Regmi & Allen M. Featherstone & David W. Archer, 2019. "Examining the financial performance of agricultural cooperatives in the USA," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 79(2), pages 271-282, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Theo Benos & Nikos Kalogeras & Martin Wetzels & Ko De Ruyter & Joost M. E. Pennings, 2018. "Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study," Sustainability, MDPI, vol. 10(12), pages 1-38, December.
    2. Damien Rousselière, 2019. "A Flexible Approach to Age Dependence in Organizational Mortality: Comparing the Life Duration for Cooperative and Non-Cooperative Enterprises Using a Bayesian Generalized Additive Discrete Time Survi," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 829-855, December.
    3. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    4. Ibrahima Barry & Damien Rousselière, 2022. "Do quality incentive payments improve cooperative performance? The case of small French agricultural cooperatives," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 938-948, September.
    5. Barbara Richter & Jon H. Hanf, 2021. "Cooperatives in the Wine Industry: Sustainable Management Practices and Digitalisation," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    6. Jason R. V. Franken & Michael L. Cook, 2019. "Do Corporate Governance Recommendations Apply to U.S. Agricultural Cooperatives?," Sustainability, MDPI, vol. 11(19), pages 1-16, September.
    7. Kuhle Prudence Mnisi & Abdul Latif Alhassan, 2021. "Financial structure and cooperative efficiency: A pecking‐order evidence from sugarcane farmers in Eswatini," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 261-281, June.
    8. Vladislav Valentinov & Constantine Iliopoulos, 2021. "Social capital in cooperatives: an evolutionary Luhmannian perspective," Journal of Evolutionary Economics, Springer, vol. 31(4), pages 1317-1331, September.
    9. Erika Ribašauskienė & Diana Šumylė & Artiom Volkov & Tomas Baležentis & Dalia Streimikiene & Mangirdas Morkunas, 2019. "Evaluating Public Policy Support for Agricultural Cooperatives," Sustainability, MDPI, vol. 11(14), pages 1-15, July.
    10. Juan Ramón Ferrer & María‐Carmen García‐Cortijo & Juan‐Sebastián Castillo Valero & Vicente Pinilla & Raúl Serrano, 2024. "Cooperatives and sustainability drivers in the Spanish wine sector. What differences do we find with investor owner firms?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(2), pages 505-526, June.
    11. Joël Cariolle & Maëlan le Goff, 2023. "Spatial Internet Spillovers in Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 59(8), pages 1163-1186, August.
    12. Brox, Enzo & Krieger, Tommy, 2022. "Birthplace diversity and team performance," Labour Economics, Elsevier, vol. 79(C).
    13. Andree Ehlert & Jan Seidel & Ursula Weisenfeld, 2020. "Trouble on my mind: the effect of catastrophic events on people’s worries," Empirical Economics, Springer, vol. 59(2), pages 951-975, August.
    14. Jasper GRASHUIS & Ye SU, 2019. "A Review Of The Empirical Literature On Farmer Cooperatives: Performance, Ownership And Governance, Finance, And Member Attitude," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 77-102, March.
    15. Aomar Ibourk & Karim El Aynaoui, 2023. "Agricultural Cooperatives’ Sustainability and the Relevance of Start-Up Support Programs: Evidence from Cooperatives’ Level in Morocco," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    16. Jiayi Wang & Yongping Wang, 2024. "Economic performance of rural collective‐owned cooperatives: Determinants and influence mechanism," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(3), pages 629-653, September.
    17. Zheng, Qianwen & Liu, Zilan & Zhang, Yunxiao, 2024. "Does public pension promote or inhibit enterprise total factor productivity? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1690-1713.
    18. Ugur, Mehmet & Solomon, Edna & Zeynalov, Ayaz, 2022. "Leverage, competition and financial distress hazard: Implications for capital structure in the presence of agency costs," Economic Modelling, Elsevier, vol. 108(C).
    19. Yuanqian He & Yiting Chen, 2024. "The Impact of Agricultural Cooperatives on Farmers’ Agricultural Revenue: Evidence from Rural China," Sustainability, MDPI, vol. 16(24), pages 1-22, December.
    20. Joey van Angeren & Govert Vroom & Brian T. McCann & Ksenia Podoynitsyna & Fred Langerak, 2022. "Optimal distinctiveness across revenue models: Performance effects of differentiation of paid and free products in a mobile app market," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2066-2100, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:113-127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.