eleDo Governance Practices Drive Product Innovation? Evidence from Agricultural Marketing Co-operative Societies in Simiyu, Tanzania

Abstract

While governance reforms are emphasised in Tanzania’s Agricultural Marketing Co-operative Societies (AMCOS), the governance–product innovation relationship remains underexplored despite its importance for competitiveness and sustainability. This study examines how governance practices influence product innovation in AMCOS in Simiyu Region, focusing on board accountability, board strategic leadership, digital governance, and inclusive governance, guided by Good Governance Theory and the Resource-Based View. A cross-sectional mixed-methods design with an embedded approach was used. Quantitative data were collected from 237 AMCOS managers using structured questionnaires, while qualitative data were obtained from District Co-operative Officers through interviews. Analysis used descriptive statistics and regression in SPSS, with qualitative data analysed thematically. Results show low product innovation, with 61.2% of AMCOS reporting no new products or services over the past three years. Regression results indicate that only board accountability has a positive and statistically significant effect on product innovation, while board strategic leadership, digital governance, and inclusive governance have statistically insignificant effects. Qualitative findings reveal that traditional business orientation, limited board capacity, dependency on external support, and a risk-intensive regulatory environment constrain innovation. The study concludes that governance practices in Simiyu AMCOS contribute little to product innovation. Accountability supports compliance and routine improvements, while other governance mechanisms do not translate into meaningful innovation due to structural and capacity limitations within a cotton-centric context. The study recommends strengthening board capacity, strategic planning systems, adopting the New Generation Co-operative model, and regulatory policy support to foster product innovation in AMCOS.