Why are there fewer and fewer cooperatives in the agricultural sector? A survival analysis within a competing risk framework

Abstract

There are few empirical explanations for the decreasing number of cooperatives in the agricultural sector. To address the gap in the literature, we investigate the incidence of mergers and acquisitions (M&As) and liquidations and dissolutions (L&Ds) among more than 1000 farmer cooperatives in the United States for the 2010–2020 period by means of survival analysis within a competing risk framework. According to our novel results, M&As are more common than L&Ds, corresponding to exit strategies of larger farmer cooperatives to achieve scale and scope economies. The incidence of L&Ds is almost entirely driven by size as relatively small cooperatives are more at risk. Implications and future research directions are discussed in the conclusion.