Epsilon Archive for Student Projects

Abstract

The globalization and industrialization trends in agricultural sector changed the scene of the cooperative institutions. The notion of “traditional” cooperative appears to be outmoded; within the Finnish agricultural model, a cooperative is a multinational organization open to stock exchange markets yet still controlled by the members. A key factor determining the successful operation of the organization is membership. As the data indicate, the majority of the farmers decide to remain royal to the organization hence they never switch to an Investor Owned Firm (IOF). Is there any profound reasoning for this behavior? Does cooperative ideology still holds an important impact, when it comes to selection of a cooperative or an IOF partner? How farmers assess the information they received from their cooperatives? Farmers who raise their voices are indeed more loyal? Using a zero inflated Poisson model on data retrieved from a sample of Finnish farmers, this project attempts to clarify “soft” factors that influence the decision of farmers to join and remain royal to a cooperative. Farmers, who will use the organization to advance their own interest, will not mind to switch if they get the same benefits or complain to the cooperative is less likely to be part of the group of farmers that never switched to an IOF. At the same time, previous good experiences, making proposal to the organization and the process of ageing appears to reduce the switching behavior among the “switchers.