The spatial variation of switching rates in large cooperative membership bases: empirical evidence from the dairy sector

Structural change at both farmer and cooperative levels has significantly altered the vertical relationships between these, with increased switching activities resulting in negative economic impacts on cooperatives. This paper uses spatial panel modelling to identify how prices, cooperative member density and competitors' processing volume affect member switching rates in a large dairy cooperative. With a unique data set, we find that these local indicators influence local members' switching decisions. Furthermore, the detected pattern indicates a spatial interdependence of local switching rates, hinting at potential interaction processes among the members, ultimately influencing the occurrence of switching decisions in the membership base.