The Malaysian co-operative sector, even after almost a century of its existence, remains a movement that has not made a significant contribution to the Malaysian economy. The usual problems associated with the weaknesses of co-operatives, such as issues related to management, finance, leadership, and members' participation have been raised, over and over again, in Malaysia. This thesis, therefore, contributes to our knowledge and understanding of co-operatives in Malaysia by presenting original empirical analysis of a unique primary data source. As such, to our knowledge, the thesis presents the first econometric study of co-operatives in Malaysia based on cooperative level data.
In countries where co-operatives have made a significant economic impact, it appears to be related to the work of secondary co-operatives, which are organisations of the primary co-operatives. Not one of the 35 secondary co-operatives in Malaysia has been noted, however, for any significant economic contribution. The possible cause of this may lie in the kind of primary co-operatives, which have individuals as members, that exist in the Malaysian co-operative movement, which may have contributed to the weakness of secondary co-operatives. The existing literature suggests that secondary co-operatives function better if primary co-operatives are small and if the primary cooperative's activity reflects the members' business. The empirical analysis presented in this thesis explores the relationship between primary co-operatives and secondary cooperatives in Malaysia, focusing on issues such as the benefits received by primary co operatives from secondary co-operatives. The findings suggest that increased primary co-operative membership represents an important source of benefits to primary cooperatives. A related issue explored in this thesis concerns the determinants of the level of trust in co-operatives among Malaysian co-operators. Finally, we present analysis of the relationship between the level of trust in the co-operative and co-operative size. The findings support an inverse relationship between co-operative size and trust, which may be the result of the institutional framework in Malaysia, which specifies that a minimum of 100 individuals are required to form a co-operative in Malaysia.