@article{Ma:168366,
      recid = {168366},
      author = {Ma, Meilin and Zhu, Heng},
      title = {Decision Making Among Heterogeneous Members: A Study on  Economic Efficiency under the Centralized Structure of  Chinese Farmer Professional Cooperatives},
      address = {2014-07},
      number = {329-2016-13003},
      pages = {25},
      year = {2014},
      abstract = {Farmer cooperatives are playing an increasingly crucial  role in the current reform of the 
agricultural sector in  China. Two features of these organizations have stood out  amidst the 
undergoing, rapid development. One is the  highly concentrated decision-making structure, while
the  other being the high level of member heterogeneity in terms  of production capacity and 
ownership portion. Current  literature has few quantitative models for analyzing the  effects of 
governance centralization and member  heterogeneity on cooperative economic efficiency. This  
article focuses on evaluating the efficiency of decisions  made under different voting structures 
when members are  highly heterogeneous. We use a net income model for a  two-stage investment 
decision. We find that members with a  larger ownership in a Chinese cooperative tend to have  
better aligned interest with the organization and can make  more efficient decisions relative to
those with less  ownership. When heterogeneity among members is high, a more  centralized 
decision making structure can lead to higher  economic efficiency. Additionally, because the 
optimal  level of centralization is determined by the redistribution  policy of cooperative profits 
and properties of member  heterogeneity, different cooperatives would accordingly  have different 
optimal degrees of centralization.},
      url = {http://ageconsearch.umn.edu/record/168366},
      doi = {https://doi.org/10.22004/ag.econ.168366},
}