Do quality incentive payments improve cooperative performance? The case of small French agricultural cooperatives

Ibrahima Barry () and Damien Rousselière
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Ibrahima Barry: LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université, ONIRIS - École nationale vétérinaire, agroalimentaire et de l'alimentation Nantes-Atlantique

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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 cooperatives' reputation. Using a quantile regression method, while controlling for the potential endogeneity of incentive payments, we show that quality-based compensation can rule out cooperative members' defrauding options. This remuneration has a non-linear positive effect on small cooperatives' performances. The results suggest that incentive payments improve small cooperatives' performances.

Keywords: Commitment; Cooperatives; Incentive; Membership; Motivations; Performance; Quality (search for similar items in EconPapers)
Date: 2022
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Published in Journal of Agricultural Economics, 2022, 73, pp.938-948. ⟨10.1111/1477-9552.12475⟩

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Journal Article: Do quality incentive payments improve cooperative performance? The case of small French agricultural cooperatives (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03724051

DOI: 10.1111/1477-9552.12475

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