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Vol 40 No 3 (2025): September

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Oct 12, 2023
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Sep 29, 2025
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The Impact of External Capital on the Performance of Agricultural Cooperatives in Indonesia

https://doi.org/10.22146/jieb.v40i3.10163
Rizki Pratomo Sunarwibowo
ps.rizki@gmail.com
Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia
Mohamad Ikhsan
Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia
Benedictus Raksaka Mahi
Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia
I Dewa Gede Karma Wisana
Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia

Corresponding Author(s) : Rizki Pratomo Sunarwibowo

ps.rizki@gmail.com

Journal of Indonesian Economy and Business, Vol 40 No 3 (2025): September

Abstract

Introduction/Main Objectives: Sufficient capital remains a notable challenge across various business models. This study investigates the influence of capital, mainly external capital, on cooperative productivity. Background Problems: Cooperatives are viewed as a potential avenue for supporting the public economy and establishing a fundamental pillar within a robust economic structure. However, in Indonesia, cooperatives have not fully realized these envisioned prospects. The issue of access to capital is believed to have an impact on the productivity of cooperatives. Novelty: Limited research has delved into the impact of capital on cooperative productivity. Our study utilized cooperative firm-level data, while the majority of prior studies have relied on less-detailed aggregate data. Research Methods: We employed recent data on agricultural cooperatives in Indonesia, covering 3,315 units. The endogenous switching regression method was applied to estimate the impact of external capital on cooperative productivity and draw comparisons between cooperatives that embraced external capital and those that did not. Finding/Results: The results indicated that cooperatives utilizing external capital exhibited a 2.8% higher level of productivity than those that did not. Additionally, we explored the impact of external capital based on cooperative size. The results revealed that large-category cooperatives experienced a 10% increase in productivity, medium-category cooperatives a 5.6% increase, small-category cooperatives a 0.8% increase, and micro-category cooperatives a 0.1% increase. Conclusion: These findings underscore the substantial influence of capital factors, mainly external capital, on cooperative productivity. The government needs to enact legislation to better regulate and support access to capital.

Keywords

cooperative external capital productivity Indonesia
Sunarwibowo, R. P., Mohamad Ikhsan, Benedictus Raksaka Mahi, & I Dewa Gede Karma Wisana. (2025). The Impact of External Capital on the Performance of Agricultural Cooperatives in Indonesia. Journal of Indonesian Economy and Business, 40(3), 421 -. https://doi.org/10.22146/jieb.v40i3.10163
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Author Biographies

Rizki Pratomo Sunarwibowo, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia

Rizki Pratomo Sunarwibowo is a lecturer and researcher in the Faculty of Economics and Business at Universitas Budi Luhur, Indonesia, where he has served as a faculty member since 2013. He received his Bachelor's degree in Management from the Faculty of Economics and Business, Universitas Gunadarma, in 2005, followed by a Master's degree in Management from Universitas Budi Luhur in 2013. He earned his Ph.D. in Economics from Universitas Indonesia in 2024. His research interests include corporate finance, financial institutions, development economics, and impact evaluation. He continues to collaborate with scholars across disciplines and has published his work in reputable international peer-reviewed journals.

Mohamad Ikhsan, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia

Mohamad Ikhsan is a Professor of Economics at the Faculty of Economics and Business, Universitas Indonesia (UI). He earned his bachelor’s degree in economics at the Faculty of Economics and Business, Universitas Indonesia, Indonesia, in 1988. He earned his Master’s degree in Economics from Vanderbilt University, USA, in 1991, and his Ph.D. in Economics from the University of Illinois, USA, in 1998. His research interests cover development economics, macroeconomic policy, poverty, and public finance. He has published extensively in national and international journals, books, and policy papers. He continues to collaborate with leading researchers and institutions on issues of economic development, structural transformation, and financial policy.

Benedictus Raksaka Mahi, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia

Benedictus Raksaka Mahi is a Professor of Economics and Public Policy at the Faculty of Economics and Business, University of Indonesia, where he has served as a faculty member since 1990. He earned his bachelor's degree in economics from the Faculty of Economics, University of Indonesia, and subsequently completed both his Master of Science in Policy Economics and Ph.D. in Economics at the University of Illinois, USA, receiving his doctorate in 1996. His research interests are concentrated in the fields of public finance, fiscal decentralization, regional economics, and investment climate analysis. His scholarly work examines the impact of fiscal decentralization on regional economic development, with a particular emphasis on evidence-based approaches to policy formulation.

I Dewa Gede Karma Wisana, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Jawa Barat, 16424, Indonesia

I Dewa Gede Karma Wisana is an assistant professor at the Faculty of Economics and Business, Universitas Indonesia (UI), where he has been a faculty member since 2007. He earned his bachelor’s in Economics from UI in 2001. He completed his M.Sc. in Development and Resource Economics at NMBU, Norway, in 2006, and his PhD in Economics from ANU, Australia, in 2013. His research focuses on household economics, migration, population, labour economics, and impact evaluation. He has collaborated with researchers across various fields on research projects at the Demographic Institute, UI, and has published articles in top-tier international journals.

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