Research by: Roberto Martin N. Galang, Rouselle F. Lavado, George O. White III, & Jamil Paolo S. Francisco 


Executive Summary

Purpose: The purpose of this study is to answer the research question: How do cooperative organizations perform when created by government fiat in an emerging market? Through the use of institutional and agency theory, this paper presents a comparative analysis of the efficiency of the cooperative form of organization and investor-owned firms-investigating how the social-political structures in a community affect the efficiency of cooperatives vis-à-vis investor-owned firms. This paper also attempts to offer a better understanding of how government quality and organizational size influence performance outcomes between different organizational forms specifically in the Philippines. 

Design Methodology Approach: The empirical analysis of this study was conducted among electric distribution utilities in the Philippines. Firm-level data was generated for 133 distributors, consisting of 119 electric cooperatives and 14 investor-owned companies. Panel data regressions were run to test all hypotheses. 

Findings: Cooperative organizations operate at a less efficient rate than investor-owned firms in the Philippines, even when controlling for firm-specific factors such as size, customer density, and profitability. In addition, the efficiency of these cooperative organizations is more strongly influenced by the quality of the local government than investor-owned firms. 

Originality Value: Positive externalities generated by the propagation of cooperatives on local communities may be based primarily on our understanding of how cooperatives have functioned largely in western contexts. Within the context of Southeast Asia, where national socio-political structures may be more dysfunctional, this paper observes that there is an equivalent negative externality caused by the tendency of cooperatives to replicate the political mismanagement of the community around it. 


To cite this article:  Galang, R. M. N., Lavado, R. F., White III, G. O., & Francisco, J. P. S. (2020). Imposing cooperation: The impact of institutions on the efficiency of cooperatives in the Philippines. Journal of Asia Business Studies, 14(4), 421-440. 


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About the Journal  

 The Journal of Asia Business Studies (JABS) is a scholarly journal that focuses on country-specific as well as comparative research on Asian business and management issues. JABS emphasizes research on strategic and operational issues faced by Asian companies operating within and beyond Asia as well as international companies operating in Asia. JABS is a double-blind peer review journal that welcomes high quality conceptual, empirical and literature review papers. 


SJR13 | ABS: 1