Farmers’ Cooperative Members’ Perception on Agency Problems and Its Impact on their Satisfaction in Ethiopia: The Moderating Role of members’ Participation on Cooperative Governance

Woldeyohanes Tena Gizaw and Professor Niu Xiongying
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Woldeyohanes Tena Gizaw: Business School, University of International Business and Economics (UIBE), Beijing, China
Professor Niu Xiongying: Business School, University of International Business and Economics (UIBE), Beijing, China

International Journal of Science and Business, 2021, vol. 5, issue 7, 186-214

Abstract: If smallholder farmers market their produce individually, they may incur significant losses from their buyers, agricultural inputs suppliers, and general service providers. However, farmers’ cooperatives can solve this problem by bringing institutional change, and they are leading solutions compared to other businesses. However, the existing cooperatives still did not fill members’ satisfaction according to members’ expectation and Ethiopian cooperatives are not exceptional. The prior research identified different evidence for the dissatisfaction of cooperative members. Among the reasons, member perception on agency problems is one of them; even though the researchers identified such issues, the cooperatives did not treated according to their unique nature rather similarly with investor owned firms (IOFs). Therefore the purpose of this study is to reconcile these gaps; hence it explored members’ perception on agency problem and its impact on cooperative members’ satisfaction in Ethiopian agricultural cooperatives. The results confirm that members’ satisfaction on cooperative governance has significant relationship with members’ perception on agency problems in Ethiopia. This study also provides evidence that members’ participation on cooperative governance moderate the relationship between perceived agency problems and cooperative members’ satisfaction on their cooperative governance in Ethiopia. Agency theory was underpin to understand the concepts; this study used the explanatory approach of research and used a cross sectional design for data collection and analysis. For the purpose of this study, the sample cooperative unions and primary cooperatives were chosen purposively however the sample 201 individual members chosen randomly and it consisted of 4 cooperative unions and 67 primary cooperatives found in Ethiopia. Hierarchal multiple regressions used to analyze the quantitative data to confirm or reject the hypothesis.

Keywords: cooperative; member’ perception; agency problem; members’ satisfaction; members’ participation (search for similar items in EconPapers)
Date: 2021
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