Multi‐stakeholder co‐operatives in China: a resource mix structure approach

Purpose – The purpose of this paper is to understand the emergence of new, multi‐stakeholder co‐operatives in China and identify their resource mix structure, as well as the influence of institutional environments. The empirical observations are related to a conceptual rationale of social enterprises as private businesses, and it is suggested that the new rural co‐operatives found in China are increasingly caught in a “co‐operative trilemma” and an emerging public–private “welfare partnership”. Design/methodology/approach – The paper is developed from a conceptual rationale of social enterprises as private businesses that are not primarily driven by financial profit but by a combination of economic and social objectives, whereby stakeholders from various institutional spheres (market, state and civil society) are increasingly involved. Based upon this, the paper analyses and synthesizes the main findings from 20 cases investigated during fieldwork conducted in China. Data were gathered through a combination of semi‐structured interviews with key figures in the field and documentary analysis. Findings – The main findings show that new co‐operatives in China indeed combine multiple resources, including members’ contributions and institutional capital, public financial support and market sales, as well as private non‐market resources such as volunteering and donations. This empirical observation provides further evidence of the transformation process of Chinese rural co‐operatives from classic mutual aids to a new model with a more outward community orientation and a multi‐stakeholder character. Moreover, it was found that institutional environments facilitate or discourage co‐operatives’ multiple resources formation. Based upon this empirical evidence it is seen how new Chinese rural co‐operatives are caught in a “co‐operative trilemma”, finding themselves “at the crossroads of market, public policy and civil society” and involved in an emerging public‐private “welfare partnership”. Research limitations/implications – The research has implications for research on co‐operatives and social enterprises in China, as well as policy implications with regard to the development of more favourable institutional support for co‐operatives as rural third‐sector organizations. Originality/value – By addressing three research questions the paper contributes to the literature on the emergence of multi‐stakeholder co‐operatives in China (and in developing countries more generally) and contributes to the literature on the capital structure of co‐operatives from practice and policy perspectives. Based upon evidence from China, the paper helps to explain how these newly emerging rural co‐operatives in China, which are struggling against capital constraints when facing a highly competitive environment and trying to catch up through a process of diversification, just like many contemporary co‐operatives in the West, are finding themselves caught in a new co‐operative trilemma.