Institutional Transition and Performance Dynamics in a Federated Agricultural Cooperative: Longitudinal Evidence From Indonesia

ABSTRACT Agricultural cooperatives in many developing countries have evolved under strong state involvement, resulting in changing institutional conditions and governance arrangements that may shape their organizational performance. Despite extensive research on cooperative governance and federated organizations, limited empirical evidence exists on how financial structures, governance indicators, and government involvement are associated with cooperative performance over time in the context of institutional transition. This study examines these associations in a federated agricultural cooperative in Indonesia over the period 1984–2025. Using the autoregressive distributed lag (ARDL) approach, this study examines the short‐run dynamics and long‐run associations between financial structure, governance indicators, government involvement, and two financial performance indicators: income and total cost‐to‐income (TCI). The results indicate that, in the long run, total assets are associated with higher income and lower TCI, while accounts receivable is associated with lower income and higher TCI. Member capital participation exhibits different associations across the short and long run. Government business involvement is associated with higher income in the long run and higher TCI in the short run, while the proportion of long‐tenure board members is associated with lower income and lower total cost‐to‐income in the long run. The findings are interpreted as empirical associations rather than causal effects. By providing longitudinal evidence from a member‐owned organization operating during institutional transition, this study contributes to understanding how observable financial structures, governance indicators, and government involvement are associated with income generation and operating cost efficiency in a federated agricultural cooperative. The findings provide context‐specific considerations for financial management and organizational governance under changing institutional conditions.