Research On Internal Trust And Organizational Performance Of Farmers’ Cooperatives

The experience of farmers’ cooperatives around the world shows that they play a pivotal role in boosting the income of small farmers and promoting local economic and social development,therefore,the development of farmers’ cooperatives has been vigorously promoted in China,becoming one of the important tools to promote agricultural and rural modernization and rural revitalization.However,behind the proliferation of farmers’ cooperatives,the quality of their development is not satisfactory,and the phenomenon of lack of basic system,irregular operation and even "shell cooperatives" is common.The overall performance of cooperatives still has great room for improvement,and their role as a carrier linking small farmers and the market is insufficient.Among them,the low level of trust within cooperatives is an important factor leading to the poor organizational performance of cooperatives,but the reasons for the low level of trust within cooperatives for a long time have not been explored yet.Meanwhile,the formation mechanism of internal trust in cooperatives and the key factors affecting the level of internal trust have not been fully discussed.In addition,it is not clear whether the influence of internal trust on organizational performance is moderated by these factors due to the existence of environmental uncertainty and the heterogeneity of cooperative leaders.Therefore,this paper takes internal trust in cooperatives as an entry point to clarify the formation mechanism of internal trust in cooperatives and the key factors affecting the level of internal trust,to explore the influence of the type of leader on the formation mechanism of internal trust in cooperatives,and to clarify the moderating effect of environmental uncertainty and differences in the type of leader on internal trust in cooperatives on organizational performance,with the aim of providing theoretical and practical guidance for the optimization of internal trust and the improvement of organizational performance in farmers’ cooperatives in China.We aim to provide useful theoretical and practical guidance for the optimization of internal trust and the improvement of organizational performance of farmers’ cooperatives in China.Based on the social survey conducted by the research group in Shaanxi Province,this paper summarizes that the low level of internal trust in farmers’ cooperatives in the research area is an important cause of poor organizational performance.Using the primary data obtained from 389 farmer cooperatives in Shaanxi Province,and using factor analysis,Tobit model,Oaxaca-Blinder decomposition method,hierarchical analysis method,PLS-SEM and other research methods,we follow the "mechanism of internal trust formation in cooperatives".--The study follows the logical line of "the key factors affecting the level of trust within cooperatives-the influence of trust within cooperatives on organizational performance",and analyzes the formation mechanism of trust within cooperatives from the internal and external institutional characteristics of cooperatives and the relationship between cooperatives and members.We further clarify the impact of internal trust on organizational performance under the moderating effect of environmental uncertainty and type of leaders.Firstly,a theoretical construction of the formation mechanism of internal trust in cooperatives is carried out and tested using real cases.Second,the Tobit model and Oaxaca-Blinder decomposition are used to identify the key factors that affect the level of trust within cooperatives.Subsequently,the moderating effects of market uncertainty and behavioral uncertainty on the relationship between trust and organizational performance within cooperatives are examined using multilevel regression analysis and instrumental variable method.Then,considering the differences in internal trust formation mechanisms of farmers’ cooperatives in China due to different types of leaders,the PLS-SEM model was used to empirically examine the paths of internal trust on organizational performance moderated by different types of leaders.Finally,based on the above study,we propose countermeasures to promote the internal trust and organizational performance of cooperatives to provide theoretical basis and practical support to promote the sustainable development of Chinese farmers’ cooperatives.The main findings of this paper are as follows:(1)The key to the formation of internal trust in cooperatives lies in the degree of reaching social exchange and the number of repeated games between cooperatives and members,which not only depends on the dependency,authority and competition relationships between cooperatives and members,but also is influenced by the internal system(property rights structure,decision-making power distribution and surplus distribution)and external system(laws and regulations,etc.)of cooperatives.Due to the strong heterogeneity of resource endowment between cooperatives and members,cooperatives led by capable households and enterprises generally adopt a "core-periphery" property right structure,and the decision-making power and surplus distribution power are usually in the hands of a few core members;cooperatives led by village party branches have a collective property right structure,and the decision-making power and surplus distribution power are equally distributed among The property rights are distributed equally among each member.In terms of dependency,authority and competition,the cooperatives led by capable farmers and the cooperatives led by village party branches are relatively more dependent on their members;the cooperatives led by enterprises are more willing to occupy an authoritative position in cooperative relationships,while the cooperatives led by village party branches adhere to the democratic control principle of "one person,one vote";the cooperatives led by enterprises occupy the absolute initiative in competitive relationships.(2)Under the guarantee of internal and external systems,the upper limit of trust level of the cooperatives run by the village party branch is higher than that of the cooperatives run by the capable and large households and the cooperatives run by the enterprises.In addition to economic exchange,social exchange like kinship is also more likely to occur between the cooperatives run by village party branches and their members.(3)The average education level of members,average health level,average number of months in rural areas,satisfaction with their villages,participation in other social organizations,market competitiveness,and access to government support and preferential funds all have significant positive effects on intra-cooperative trust.For cooperatives with different types of leaders,members’ satisfaction with their villages was the most significant factor that led to the endowment differences in internal trust levels between cooperatives led by capable people and cooperatives led by enterprises and cooperatives led by village party branches,while the external support received by cooperatives and the market competitiveness of cooperatives widened the endowment differences in internal trust levels between cooperatives led by enterprises and cooperatives led by village party branches.(4)Environmental uncertainty has a moderating effect on the relationship between internal trust and organizational performance in cooperatives,but there is a difference in the moderating effect between market uncertainty and behavioral uncertainty.Market uncertainty amplifies the effect of intra-organizational relational trust,but it needs to be controlled within a reasonable range;behavioral uncertainty environment amplifies the effect of intra-organizational institutional trust and brings more negative than positive effects on relational trust.(5)Internal trust(relational trust and institutional trust)in cooperatives has a positive effect on organizational performance(economic performance and non-economic performance),among which the positive effect of relational trust on economic performance is weaker than that of institutional trust,and the positive effect of relational trust on non-economic performance is stronger than that of institutional trust.In terms of the moderating effect of the type of leader,compared with the cooperatives led by capable farmers,the effect of relational trust on the economic and non-economic performance of the cooperatives led by enterprises is relatively small,and the effect of institutional trust is relatively strong;the economic and non-economic performance of the cooperatives led by village party branches is relatively high for both relational trust and institutional trust.The above study has made some theoretical marginal contributions in terms of clarifying the formation mechanism of internal trust in farmers’ cooperatives in China,the differences in the formation mechanism of internal trust in different types of cooperatives,the construction of the evaluation index system of internal trust,and the relationship between environmental uncertainty and different types of leaders on the influence of internal trust on the organizational performance of cooperatives.Based on the obtained findings,this paper proposes the following recommendations for the optimization of internal trust and the improvement of organizational performance of cooperatives: first,cooperatives should optimize the property rights structure and improve the system construction according to their own characteristics(type,resource endowment,industrial field,etc.),establish a perfect benefit mechanism based on patronage return,increase the opportunities for members to share the benefits of cooperatives,and increase the democratic participation of members in the internal The government should continue to increase its support for farmers.Secondly,the government should continue to increase support for farmers’ cooperatives,but it should not be limited to financial project support,but should focus on the standardization of guidance and supervision of cooperative system construction,and give the cooperatives room for innovation and development.Finally,for different types of cooperatives with different leaders,the internal trust structure should be optimized according to their own development stages,and the positive effects of relationship trust and institutional trust should be brought into play.The development of cooperatives led by village party branches should be encouraged and vigorously supported,so as to grasp the government’s positioning,ensure the autonomy of cooperatives led by village party branches,cultivate village elites,develop democratic participation channels,plan the industrial layout,and promote the overall transformation of villages with industrial upgrading.