Open    Access



Using Logistic Regression to Identify the Entrepreneurial Capability of Thai Agricultural Cooperatives

Members on Their Farm Management






Author(s)

Chanchai Petchprapunkul, Narong Koojaroenprasit, Rangsan Pitipanya, Suchin Pleehajinda

Full-Text PDF XML     878 Views

DOI:10.17265/2328-2177/2016.11.002

Kasetsart University, Bangkok, Thailand

This study elaborates three things: Firstly is the current agricultural cooperatives management and their low farm performance in eight provinces in the eastern of Thailand where are the bases of Thailand famous fruits products. Secondly is to point out the key concepts of the theory of entrepreneur and the strength of it to assist the community development, to teach young people, adults and cooperatives members to prepare them to pertain good entrepreneurship that meets cooperatives concepts and principles. Thirdly is to give an example of research study that describes how to identify entrepreneurial capability of agricultural cooperatives members in Thailand, dependent variable is qualitative or binary, we use “odds value” or probability of success over the probability of failure to identify the set of odds value, and use exponential function to transform the odds value to be the log of odds or Logit model. If probability of entrepreneur is over the cutting point of 0.8, it implied that members are pertained high entrepreneurial capability and vise versa. The first step of research is the analysis of five year panel secondary data during 2011-2015, collected from Cooperatives Auditing Department. Eight groups of 679 numbers of data from 215 cooperatives were calculated, data were divided by the number of member. These eight independent variables are Total income per member, Total equity per member, Net profit per member, Co-ops operating capital per member, Total cooperatives capital per member, Total deposit per member, Total asset per member, Number of member. Qualitative data are the four sizes of cooperatives: large, big, medium, and small. Qualitative data are the only one intervening variable in the model. Secondary data found that only four quantitative independent variables effect to entrepreneurial capability. Total asset per member, and Total income per member had negative effect, but Net profit per member, and Cooperatives capital per member had positive effect. It means that if cooperatives acquire more and more asset, cooperatives will have more burden of debt or equity and probability of entrepreneur will be decreased. If cooperatives gain more and more income to the firm, it means the complex organization or the cooperatives will success but the individual member who is individual firm will get loss. Cooperatives capital per member and Net profit per member have positive effect. Because cooperatives capital were gained from residual and after the allocation of cooperatives surplus to be patronage refund according to the volume of business which member had done with the cooperatives and dividend pay out to member according to the number of stocks they held for their saving with the cooperatives. For qualitative variable, large and medium size of cooperatives had no any effects, but small size of cooperatives had more effect than the big size. It implied that big cooperatives who had more and more number of members have more and more burden. Small size of cooperatives is similar to individual firm of each member. Thus, optimum size of cooperatives is suitable for their service and efficient management, if the size of business volume increasing continuously, the quality of service will decrease, because almost cooperatives organization is pricing at break even point. Second step is a primary survey of data from Rayong province. Seventy-five samples of cooperatives members have not recorded their business information, both revenue and cost. We cannot use logistic regression to run the second model, but only Multiple Regression Analysis (MRA). MRA results identify that the cooperatives profit of each member depends on three variables: (1) sales, (2) member responsibility (not board member responsibility or Management responsibility), (3) member’s level of education. Suggestion and recommendation is that agricultural cooperatives members in Thailand still have to improve their entrepreneurial capability by recording all information related to business functions and prepare financial record to represent efficient use of resources to meet member and community’s needs.

cooperatives, entrepreneurial capability, break even point, odds value, log of odds, logistic regression