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Do bottom-up and independent agricultural cooperatives really perform better? : insights from a technical efficiency analysis in Ethiopia

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Abstract
The cooperative landscape in Ethiopia is very heterogeneous with a mixture of remains of the pre-1991 government-controlled system and new post-1991 bottom-up collective action initiatives. This heterogeneity, coupled with a large growth in the number of cooperatives in the country, offers an interesting perspective to study the determinants of the (in)efficiency of cooperatives. In this paper, we analyse the performance of Ethiopian agricultural cooperatives, focusing on the degree of technical (in)efficiency and its determinants. We use the stochastic frontier approach in which we account for heteroskedasticity and the monotonicity of production functions, presenting a methodological improvement with respect to previous technical efficiency studies. The results show that NGO- and government-initiated cooperatives are less efficient than community-initiated ones, implying that governments and NGOs should not interfere too strongly in cooperative formation. Cooperatives with a high degree of heterogeneity in members' participation are found to be about 98% less efficient, while cooperatives that have paid employees are 33% more efficient. Besides, results show that cooperatives in Ethiopia function more efficiently if they incentivize committee members through monetary compensation.
Keywords
SMALLHOLDERS COMMERCIALIZATION, MARKETING COOPERATIVES, FRONTIER, ESTIMATION, COLLECTIVE ACTION, DUMMY VARIABLES, TECHNOLOGY, DETERMINANTS, INSTITUTIONS, PRODUCTIVITY, GOVERNANCE, Technical efficiency, agricultural cooperatives, stochastic frontier, approach, cooperative performance, cooperative heterogeneity, Ethiopia

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MLA
Gezahegn, Tafesse W., et al. “Do Bottom-up and Independent Agricultural Cooperatives Really Perform Better? : Insights from a Technical Efficiency Analysis in Ethiopia.” AGREKON, 2020.
APA
Gezahegn, T. W., Van Passel, S., Berhanu, T., D’Haese, M., & Maertens, M. (2020). Do bottom-up and independent agricultural cooperatives really perform better? : insights from a technical efficiency analysis in Ethiopia. AGREKON.
Chicago author-date
Gezahegn, Tafesse W, Steven Van Passel, Tekeste Berhanu, Marijke D’Haese, and Miet Maertens. 2020. “Do Bottom-up and Independent Agricultural Cooperatives Really Perform Better? : Insights from a Technical Efficiency Analysis in Ethiopia.” AGREKON.
Chicago author-date (all authors)
Gezahegn, Tafesse W, Steven Van Passel, Tekeste Berhanu, Marijke D’Haese, and Miet Maertens. 2020. “Do Bottom-up and Independent Agricultural Cooperatives Really Perform Better? : Insights from a Technical Efficiency Analysis in Ethiopia.” AGREKON.
Vancouver
1.
Gezahegn TW, Van Passel S, Berhanu T, D’Haese M, Maertens M. Do bottom-up and independent agricultural cooperatives really perform better? : insights from a technical efficiency analysis in Ethiopia. AGREKON. 2020;
IEEE
[1]
T. W. Gezahegn, S. Van Passel, T. Berhanu, M. D’Haese, and M. Maertens, “Do bottom-up and independent agricultural cooperatives really perform better? : insights from a technical efficiency analysis in Ethiopia,” AGREKON, 2020.
@article{8631481,
  abstract     = {The cooperative landscape in Ethiopia is very heterogeneous with a mixture of remains of the pre-1991 government-controlled system and new post-1991 bottom-up collective action initiatives. This heterogeneity, coupled with a large growth in the number of cooperatives in the country, offers an interesting perspective to study the determinants of the (in)efficiency of cooperatives. In this paper, we analyse the performance of Ethiopian agricultural cooperatives, focusing on the degree of technical (in)efficiency and its determinants. We use the stochastic frontier approach in which we account for heteroskedasticity and the monotonicity of production functions, presenting a methodological improvement with respect to previous technical efficiency studies. The results show that NGO- and government-initiated cooperatives are less efficient than community-initiated ones, implying that governments and NGOs should not interfere too strongly in cooperative formation. Cooperatives with a high degree of heterogeneity in members' participation are found to be about 98% less efficient, while cooperatives that have paid employees are 33% more efficient. Besides, results show that cooperatives in Ethiopia function more efficiently if they incentivize committee members through monetary compensation.},
  author       = {Gezahegn, Tafesse W and Van Passel, Steven and Berhanu, Tekeste and D'Haese, Marijke and Maertens, Miet},
  issn         = {0303-1853},
  journal      = {AGREKON},
  keywords     = {SMALLHOLDERS COMMERCIALIZATION,MARKETING COOPERATIVES,FRONTIER,ESTIMATION,COLLECTIVE ACTION,DUMMY VARIABLES,TECHNOLOGY,DETERMINANTS,INSTITUTIONS,PRODUCTIVITY,GOVERNANCE,Technical efficiency,agricultural cooperatives,stochastic frontier,approach,cooperative performance,cooperative heterogeneity,Ethiopia},
  language     = {eng},
  title        = {Do bottom-up and independent agricultural cooperatives really perform better? : insights from a technical efficiency analysis in Ethiopia},
  url          = {http://dx.doi.org/10.1080/03031853.2019.1663223},
  year         = {2020},
}

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