Investigating difficulties and failure in early-stage rural cooperatives through a social capital lens

Abstract

Rural cooperatives are assumed to contribute to economic development, regeneration, service delivery and local democracy. This paper examines the problems of setting up early-stage rural cooperatives, the difficulties experienced by them, and antecedents of their failure by complementing extant research with an empirical study of existing and recently failed early-stage Welsh cooperatives. Factors inhibiting early-stage rural cooperative growth and survival encompass various aspects of negative and antithetical social capital, exacerbated by management and marketing weaknesses, as well as regional and national institutional conditions. Such factors are relevant to theory development, cooperative management practice and public sector policy, and are theorised from rural cooperation, social capital and rural development perspectives.