RISK AND EQUITY IN AGRICULTURAL COOPERATIVES

This research examines the effects of risk-related factors on the proportion of equity held by agricultural cooperatives. The empirical analysis indicates that capital structure is significantly affected by the level and variation of profitability, commodities handled, and market function. The proportion of equity is not affected by size or pooling. Contrary to expectations, the results indicate an inverse relation between profit variability and the proportion of equity. Cooperatives rely on profit for equity accumulation through retained earnings. If this source of equity is unstable, the cooperative may not be able to generate sufficient equity causing the estimated inverse relationship.


Subject(s):
Issue Date:
1991
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/14032
Total Pages:
16
Series Statement:
Staff Paper P91-37




 Record created 2017-04-01, last modified 2017-08-22

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)