Quality in Cooperatives versus Investor Owned Firms: Evidence from broiler production in Paraná, Brazil

Organizational economics points to the weaknesses of cooperatives in producing high-quality products compared with investor-owned firms (IOFs). In the Brazilian broiler industry, suppliers delivering to a cooperative are performing better on quality than suppliers to an IOF. Data was collected through a survey among suppliers of one cooperative and two IOFs. What could explain the cooperative's advantage in terms of suppliers' quality performance? Results show that there are important differences regarding relationship characteristics such as dependence, behavioral uncertainty, market risk reduction, and adaptation support, which could account for the higher quality products of the cooperative farmers.