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Abstract

Structural change at both farmer and cooperative level has significantly altered the vertical relationships between them, with increased member switching activities resulting in negative economic impacts on cooperatives. This paper uses spatial panel modelling in combination with simulation approaches to identify the impact of prices and cooperative member density as well as competitors’ organizational form, production quantity and production growth on members’ switching decisions. With a unique data set we can show that these indicators determine switching decisions. Additionally, findings hint at the relevance of social interaction for members’ switching decisions.

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