The institutional capacity of cooperatives is the main component that determines the ability of rural cooperatives in adapting to the changes that occur, also in order to meet needs of the their members and clients.The purpose of this research was an assessment of institutional capacity of rural co-operatives in Sari county. This applied research was carried out using survey research method. The statistical population of this research were consisted of the all members of the 14 rural cooperatives in Sari county (N = 18812), of which 230 were selected using cluster sampling technique. A researcher-made questionnaire was used to collect data. The validity of the questionnaire was determined based on experts view and reliability was confirmed based on Cronbach's alpha coefficient for different scales (from 0.73 to 0.92). The results of assessment institutional capacity components in cooperatives indicated that the component of resource access development were in very low level, components of institutional learning and innovation and institutional quality were in low level, and the components of institutional effectiveness and efficiency institutional communication and integration were in the average level. According to the correlation matrix, there is a positive and significant relationship between the components of institutional capacity. The results of path analysis showed that institutional effectiveness and effectiveness were directly influenced by institutional quality, resource access development, institutional learning and innovation, institutional communication and integration.
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