Assessing the performance of co-operatives in Malaysia: an analysis of co-operative groups using a data envelopment analysis approach

Abstract

This study assesses the performance of co-operatives in Malaysia by evaluating 56 out of the 70 co-operative groups. The productivity and efficiency of the groups were evaluated in the first- and second-stage analysis by employing the data envelopment analysis and Tobit regression model. Despite the financial and non-financial support by the federal government and perceived significant role played by the co-operatives in the country's development, the findings indicate that the performance of co-operatives have not been satisfactory. Only 19.6% of the groups under study were found to be efficient and the ‘big co-operatives’ that comprise less than 2% of total co-operatives in the country dominated among the successful ones. The results endorse the general perception that co-operatives in Malaysia are facing challenges necessitating immediate attention.

Keywords::

• co-operatives
• DEA
• efficiency
• Malaysia
• productivity
• Tobit regression

Notes

^1. Email: [email protected]

^2. Email: [email protected]

^3. GBP = RM 5.49. Source: Central Bank (BNM) 2014, updated 10 March 2014.

Additional information

Notes on contributors

Azmah Othman

Azmah Othman is currently a senior lecturer in the Department of Development Studies, Faculty of Economics and Administration, University of Malaya. She has been involved in teaching, research, writing and publishing on topics related to co-operative, development, agriculture and poverty. She serves as a member of the National Co-operative Consultative Council under the Malaysia Co-operative Societies Commission.

Norma Mansor

Norma Mansor is currently a professor in the Department of Administrative Studies and Politics and director of Social Security Research Centre, University of Malaya. She has written nearly 100 academic reports, articles and chapters in book on topics ranging from public policy, public administration and governance. She serves as reviewer and editorial board member of several journals.

Fatimah Kari

Fatimah Kari is formerly the director of the Centre for Poverty and Development Studies (CPDS), University of Malaya and associate professor in the Department of Economics, Faculty of Economics and Administration, University of Malaya. She has published and presented many scholarly papers in the area of environment and poverty, Poverty Indexing, and environment and growth. She has been a consultant for several consultancy projects sponsored by the Ministry of Energy, Green Technology and Water (KeTTHA), Ministry of Natural Resources and Environment (MNRE) and Economic Planning Unit, Prime Minister's Department, Malaysia.