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The spatial variation of switching rates in large cooperative membership bases: empirical evidence from the dairy sector

Author

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  • Tim Viergutz
  • Nana Zubek
  • Birgit Schulze-Ehlers

Abstract

Structural change at both farmer and cooperative levels has significantly altered the vertical relationships between these, with increased switching activities resulting in negative economic impacts on cooperatives. This paper uses spatial panel modelling to identify how prices, cooperative member density and competitors’ processing volume affect member switching rates in a large dairy cooperative. With a unique data set, we find that these local indicators influence local members’ switching decisions. Furthermore, the detected pattern indicates a spatial interdependence of local switching rates, hinting at potential interaction processes among the members, ultimately influencing the occurrence of switching decisions in the membership base. JEL classification: C23, D23, P13, Q13, R32

Suggested Citation

  • Tim Viergutz & Nana Zubek & Birgit Schulze-Ehlers, 2020. "The spatial variation of switching rates in large cooperative membership bases: empirical evidence from the dairy sector," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 47(4), pages 1438-1472.
    • Handle: RePEc:oup:erevae:v:47:y:2020:i:4:p:1438-1472.
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    File URL: http://hdl.handle.net/10.1093/erae/jbz042
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    More about this item

    Keywords

    agricultural cooperatives; dairy sector; switching behaviour; member loyalty; spatial price incentives;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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