Marketing cooperatives and financial structure: a transaction costs economics analysis

The relationship between the financial structure of a marketing cooperative (MC) and the requirement of the domination of control by the members is analysed from a transaction costs perspective. A MC receives less favourable terms on outside equity than a conventional firm because the decision power regarding new investments is not allocated to the providers of these funds. This is a serious threat to the survival of a MC in a market where efficient investments are characterised by an increasing level of asset specificity at the processing stage of production. A MC is predicted to be an efficient organisational form when the level of asset specificity at the processing stage of production is at a low or immediate level compared to the level of asset specificity at the farming stage of production. © 2001 Elsevier Science B.V. All rights reserved.


Issue Date:
2001-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/181436
Published in:
Agricultural Economics: The Journal of the International Association of Agricultural Economists, Volume 26, Issue 3
Page range:
205-216
Total Pages:
12




 Record created 2017-04-01, last modified 2017-12-02

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