Marketing Cooperatives and Financial Structure
2000-05-12
Research Paper
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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.
- G3 : Corporate Finance and Governance
- M : Business Administration and Business Economics; Marketing; Accounting
- L2 : Firm Objectives, Organization, and Behavior
- M10 : Business Administration: General
- D2 : Production and Organizations
- asset specificity
- asset
- governance
- specificity
- level
- investment
- structure
- market
- problem
- control
- equity
- hold-up problem
- governance structure
- member
- decision
- hold-up
- governance structures
- stage
- production
- figure
