Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan

Bo Wang, Po-Yuan Cheng, Brian Lee, Lih-Chyun Sun and Hung-Hao Chang
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Bo Wang: School of Economics and Management, Fuzhou University of International Studies and Trade, Fuzhou 350202, China
Po-Yuan Cheng: Department of Leisure and Recreation Management, Taipei City University of Science and Technology, Taipei 112, Taiwan
Brian Lee: Department of Agricultural Economics, National Taiwan University, Taipei 10617, Taiwan
Lih-Chyun Sun: Department of Urban Industrial Management and Marketing, University of Taipei City, Taipei 11153, Taiwan
Hung-Hao Chang: Department of Agricultural Economics, National Taiwan University, Taipei 10617, Taiwan

Sustainability, 2019, vol. 11, issue 18, 1-12

Abstract: Recent research has highlighted the importance of agricultural cooperatives on farm production. Although the consensus from the literature suggests that participating in these organizations significantly affects farm production, there is inconclusive evidence on whether this effect is positive or negative. Moreover, previous studies solely focus on the magnitude of this effect and fail to explain the mechanism behind it. This study contributes to this knowledge gap by estimating the impact of agricultural cooperatives on farm profits. To do this, we apply the causal mediation analysis to explain the potential mechanism behind this relationship. Using a nationally representative survey of farm households from Taiwan in 2013, we find that participating in cooperatives increases farm profits. Furthermore, this effect is more pronounced for producers with higher profits. Concerning the mechanism, we find that the use of food labels accounts for approximately 15 to 28% of the total effect of cooperative participation on farm profits.

Keywords: agricultural cooperatives; farm profits; causal mediation analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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