Determinants and impacts of marketing channel choice among cooperatives members: Evidence from agricultural cooperative in China

This paper examines the impact of agricultural cooperatives working as a marketing channel, and the determinant of members’ decision to sell products through agricultural based on household-level data of agricultural cooperatives members from poor rural areas in Sichuan province, in China. Employing different treatment effect estimators, i.e. PSM and IPWRA, we find that selling products through agricultural cooperatives has a positive and statistically significant effect on both farmers’ annual total household income and farm income. It was also found that the effect on farm income (around 180%) is higher than annual total household income (around 20%). Comparing the difference between ATTs and ATEs, we could suggest that the efficiency of agricultural cooperatives can be improved by encouraging non-sellers to sell products through agricultural cooperatives, which is possible to do according to the results of a probit model. Following empirical results obtained using the probit model, we conclude that farm size, farming machine, distance to market, credit constraint, sale condition, motivation to participate in agricultural cooperatives and the knowledge of agricultural cooperatives positively and significant influence the probability of a member selling products through agricultural cooperatives, while the market information ownership shows a negative significant effect on the choice.