| Supply and Marketing Cooperatives (SMC) once existed as the largest farmers’ economicorganization in terms of cooperatives. However, its function of cooperation failed to work dueto the interference of state government. Though the cooperation-oriented SMC came to rebirthas a positive result of open-up and reform policy, the path dependence of its situationalchange deferred its rapid development and the recognition on the part of the farmers. Takingthe specific practice in Guangdong, with the theoretical support of Marxism theory andnetwork organization, analytical support of field survey and model analysis, this paperfocuses on the theoretical analysis and fact finding of Guangdong SMC institutional changefrom an neoinstitutional economics view, exploring to provide instructive suggestions on howto avert the path dependence of SMC institutional change, and furthering the study in theapplication of neoinstitutional economics in the development and reform of SMC.With a full examination of the related theoretical understanding, the author starts with thediscussion on the institutional change and efficiency evaluation of traditional SMC.Institutional change theory is introduced to study the means and motivation of institutionalchange of traditional Guangdong SMC. The external basis of the economic entity’soperational efficiency in SMC system is applied to evaluate the efficiency of institutionalinnovation, associated with the DEA evaluation system, to measure and evaluate theefficiency of traditional SMC system. Then the paper develops to evaluate the same factors ofGuangdong SMC system in modern times, illustrated with the practice and efficiency ofinstitutional reform in Guangdong SMC system and three typical examples in new times. Inaddition, by taking the first reformed districts as reform group while the second as non-reformgroup, the author applied DID model to analyze the influence of new-period institutionalreform on the efficiency promotion of local cooperatives, basic company and collectivismenterprises, and the Probit model used to estimate the contributing factors in institutionalchange and operational efficiency. Last, the author puts forward some suggestion onaccelerating the SMC institutional reform, to enhance the role of service for farmers byexpanding the traditional business of SMC, to improve the profitability by promoting thereform of basic companies, to strengthen the competitiveness by furthering the reform ofcollectivism enterprises and to improve the efficiency of capital by gaining more financialsupport. Findings of this paper are listed as below:1. Examined from the way of reform, the traditional reform is passive so as to beadaptable to the external reform of economic reform while the new reform is initiative topromote itself with the high market adaptability.2. The operational efficiency of traditional Guandong SMC system experienced a changein V-shape. The estimate suggests that both the change of TFP and TECHCH of GuangdongSMC showed V-shape from1978to2008. The troughs which emerged in1992and2003indicated that the institutional reform of Guangdong SMC explored their way to findadaptable operational system to market-oriented economy and solution to survival.3. Then improvement of operational efficiency of Guangdong SMC system attributes tothen promotion of management efficiency steming from the institutional innovation. Theaverage growth rate of TFP of Guangdong SMC from1978to2008was3.63%, whichbenefited by the management improvement resulting institutional innovation (4.53%), and thefact that the change in Techch is antecedent to that of TFP. The comparison between differentregions shows that underdeveloped area of east wing ranks the first, followed by thedeveloped PRD, underdeveloped agriculture-oriented area of west wing and less developedrural area of Northern Guangdong.4. The ways of SMC Institutional innovation in new times mainly includes: to optimizebasic units via having them involved in agricultural industrialization, to reform thecollective-owned firms via diversifying property and to transform the cooperatives byseparating the enterprises management from the government administration and enabling theenterprises more autonomous.5. Operational efficiency of reformed SMC in new times demonstrates a satisfactorydevelopment, though along with the problem of polarization. The estimate result reflect thatthe overall efficiency of Guangdong SMC in2009and2010stay high while the polarizationof operational efficiency emerged, showing that some well-performed SMC remain stable inhigh efficiency while some Local SMC experienced slight change in the advance of efficiency.The scale efficiency of basic units in2010experienced a decrease of11%compared with thatof in2009, as the reformed financial support declined yearly which casted small-scale basicunits to tough situation. The technical and economic efficiency of farming endowment currentbusiness in shows regional features. Some farming endowment current companies inunderdeveloped region were reduced to unpleasant status of low technical and economicefficiency.6. Institutional innovation in modern cooperatives and basic units focus on theimprovement of management efficiency, reflected in collective-owned firms as theimprovement of scale efficiency. The two-year operation in first reformed cooperatives scattering in6regions improve their total factor by19%,10.8%higher than that ofnon-reformed group,9.9%higher in management efficiency and5.9%higher in scaleefficiency. Basic units:21reformed basic units in the survey have their total factor efficiencyimproved by28.8%after the two-year reform,11.4%higher than that of non-reformed group,10.2%higher in the improvement of management efficiency and4%higher in theimprovement of scale efficiency. The first reformed18collective-owned firms have their totalfactor efficiency increased by13%in the two-year operation,9%higher than that ofnon-reform group,11.3%higher in the increase of management efficiency and22.1%higherin the promotion of scale efficiency.7. The influential factor on the performance of institutional innovation varies amongcooperatives, basic units and collective-owned firms.Cooperatives: at significant level of5%, the coefficient of regression of managementefficiency, total profit, gross output value of agriculture and farmers’ per capita net income inradiation zone shows a distinctive non-zero index, which suggests the influential andsupportive roles of the four factor play in the institutional reform of cooperatives. Basic units:at the level of5%, the coefficient of regression of scale efficiency, financial investment andthe gross output value of agriculture in radiation zone shows a non-zero index, which suggeststhe slight influence of the three factors on the perform of policies in basic unit reform.Collective-owned firms: at the level of5%, the coefficient of regression of managementefficiency, scale efficiency, total profits, material cost, total assets and the gross output valueof agriculture in radiation zone shows a non-zero index, which shows the influence of the sixfactors on the performance of reform policies in collective-owned firms.This paper came to a conclusion that, the institutional reform of Guangdong SMC in newtimes is considered efficient in total. When the efficiency-oriented institution came to being,the change required constant optimization and amendment within the total framework ofinstitutional reform. The course of change is a change of subordinate institution relying on thenew SMC system, which can be called Institutional Changes on the Same Track. The changeof subordinate institution is expected to explore the potential profit within the new SMCsystem instead of making a breakthrough of the existed dominant framework. The marginalbenefit of institutional change on the same track is characterized with an increase followed bya decrease. Only when the marginal benefits of subordinate institution change goes to zero,does the new SMC institution needs to be reformed or to be replaced by the more advancedand environmentally adaptable institutions. |
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