Marketing Cooperatives and Financial Structure
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 favorable 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 characterized by an increasing level of asset specificity at the processing stage of production. A MC is predicted to be an efficient organizational 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.
|Keywords||finance, marketing cooperative, transaction costs economics|
|Publisher||Erasmus Research Institute of Management (ERIM)|
Hendrikse, G.W.J., & Veerman, C.P.. (2000). Marketing Cooperatives and Financial Structure (No. ERS-2000-09-ORG). Erasmus Research Institute of Management (ERIM). Retrieved from http://hdl.handle.net/1765/19