What factors influence the vertical integration of agricultural cooperatives?—Evidence from 500 cooperatives in Heilongjiang, China

Abstract

The unique nature of agricultural cooperatives determines that their business scope is significantly influenced by individual and organizational operations as well as government intervention. This paper examines various factors affecting the operation of cooperatives at the individual level, the cooperative level and the government level by applying the multivariate ordered probit regression model and marginal probability analysis to the research data of 500 agricultural cooperatives. The results indicate that directors’ practical experience (EXP), demonstration ratings, explicit incentives (EIs), and government-provided training (TRAIN) exert a significant influence on cooperatives’ vertical integration (VI). These findings offer valuable insights for cooperative managers and policymakers, suggesting that the level of VI can be advanced by enhancing directors’ practical EXP, improving demonstration ratings, increasing both the absolute and relative values of EIs, and, at the same time, obtaining and participating in more government-provided TRAINs.