Effects of member size and selective incentives of agricultural cooperatives on product quality

Abstract

Purpose – The purpose of this paper is to analyse the effects of member size and external incentives (food safety certification and target market) on cooperative’s product quality, using data collected from 135 apple producing cooperatives in China. Design/methodology/approach – Given that different indicator variables were used to measure apple quality, the authors employed a principle component analysis method to reduce the measurement dimension. An ordinary least square regression was employed to analyse the effects of member size and selective incentives of agricultural cooperatives on product quality. Findings – The empirical results show that member size and cooperative’s product quality bear an inverse “U-shape” relationship, and food safety certification and target market variables tend to positively and significantly influence cooperative’s product quality. In particular, the cooperatives with more food safety certificates and targeting supermarkets and export enterprises are more likely to supply high-quality products. Originality/value – This study provides the first attempt to measure apple quality and investigate the factors that influence cooperative’s product quality.