Member commitment in farmers' cooperatives in China: The role of contractual and relational governance mechanisms

Abstract

Farmers' cooperatives play a critical role in social, economic, and environmental sustainability in terms of poverty reduction, food quality and safety, farm sustainability, and members' well-being. However, they are generally faced with low or declining member commitment, which restricts their performance and sustainable development. This study aims to investigate the effect of cooperative governance on member commitment as well as the moderating effects of cooperative types through an empirical exploratory study applying a random sampling survey. The results indicate that both contractual and relational governance have significant positive effects on member commitment, but vary with cooperative types. Specifically, there is a greater effect of contractual governance in company-affiliated cooperatives than in primary cooperatives, while the effects of relational governance increase in the order of company-affiliated, primary, and company-led cooperatives. Moreover, relational governance displays a greater positive influence on member commitment than contractual governance. These findings suggest that cooperatives should take organizational features, contractual and relational governance into consideration to improve member commitment and sustainable development.