<p> In Japan, Consumer Cooperatives （Co-op）, particularly the regional Co-ops that supply safe, secure and high-quality food to consumers, play an important role in the development of Japanese food systems. Members of Co-ops participating in the business operation at various levels are also consumers. However, studies on Co-ops from the viewpoints of both theoretical and empirical economics analyses, especially in corporate governance, are not sufficient.</p><p> Therefore, in this paper, we aim to clarify the role of Co-ops in the development of food systems in Japan and their dynamics in quality-enhancing innovation empirically from the view of corporate governance. First, we present a new analytical framework for economic theory considering the service innovation in Co-ops and driving forces based on the synthesis of the theories of industrial organization and corporate governance. Next, we will empirically clarify the factors for development of the Co-ops based on financial data and a survey on the members' consciousness. Finally, we derive policy implications on the roles and tasks of Co-ops in the sustainable development of food system based on the analytical results.</p><p> Based on the theoretical consideration and analytical results so far, following three points about the role of Co-ops in the sustainable development of food systems can be pointed out. First, Japanese Co-ops contribute to sustainable development of food system through promoting and securing food safety. Secondly, the governance model of Japanese Co-ops is clarified to be the model of quasi-multi stakeholder and there is the positive correlation among the cooperative management of members, the formation of social capital and the satisfaction level of members. Therefore, the improvement of cooperative governance contributes to the innovation in quality of food products.</p><p> Finally, the behavior and the performance of Japanese Co-ops are closely related to the structure of regional food market. The environment surrounding the competitive relationships among regional Co-ops and between Co-ops and food retailers not only affects the performance of each Co-ops but also the entire regional food market.</p><p>JEL Classifications: Q10, M10</p>