Inhibiting or Promoting: An Econometric Analysis of the Impact of Farmers’ Cooperatives on Rural Collective Economy

This paper first theoretically analyzed the impact mechanism of farmers’ cooperatives on rural collective economy, and then empirically analyzed the impact of farmers’ cooperatives on rural collective economy with village-level survey data from the rural social governance database of the Ministry of Civil Affairs by using propensity score matching (PSM), and generalized propensity score matching (GPSM). The results showed that, the existence of cooperative in villages had a significant negative effect on the rural collective economy. However, as the proportion of farmers joining cooperatives increases, the impact of cooperatives on the rural collective economy showed a “U-shaped” relationship of suppression followed by promotion. The mechanism tests found that, before the proportion of peasant households joining cooperatives reached a certain proportion, the existence of cooperative in villages and the proportion of peasant households joining cooperatives inhibit collective economic development by increasing the expenditure of village administrative office expenses, crowding out the energy of village cadres, reducing the number of disclosures of the financial status of village collective economic organizations, and undermining the openness and transparency of rural collective economic organizations. To realize the complementary development of farmers’ cooperatives and the rural collective economy, there is still a lot of work to be done.