Technical assistance: A determinant of cooperative member loyalty

Abstract

AbstractCooperative organizations face problems with the opportunistic behavior of their members, such as the “free‐rider problem”. To mitigate this problem, cooperative governance systems develop strategies that aim to maximize the economic gains of cooperative members through investments in technical assistance programs. The purpose of our research is to verify if the participation in the technical assistance program increases the probability of loyalty of dairy cooperative members. To this end, we developed an econometric model with logistic regression, using secondary data extracted from the Programa Gerencial Leite. The program is developed by the cooperative system of the State of Rio Grande do Sul in Brazil and comprises 24 cooperatives. The collected data are longitudinal and include the commercial milk transactions carried out between cooperative members and cooperatives during the years 2014 to 2018, totaling 10,548 cooperative members and 28,765 observations collected and analyzed during this period. Our results indicate that participation in the technical assistance program offered by the cooperative governance increases the probability of loyalty of dairy farmers.