Factors affecting farmers' networking decisions

Abstract

This paper analyses farmers' decisions to carry out transactions by using three different types of networks: input supply cooperatives, processing and/or marketing cooperatives, and producers associations. We use arguments from economic sociology and new institutional economics to define the main factors affecting farmers' networking decisions, namely relational, asset and location specificity. We applied a multivariate probit (MVP) model to a sample of 15,368 Italian farmers recorded in the 2006 FADN database in order to analyse the simultaneousness of networking decisions and the main driving factors involved. Our results show that farmers are more likely to join different network types simultaneously.