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Abstract
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.