Chain Interdependencies, Measurement Problems, and Efficient Governance Structure: Cooperatives versus Publicly Listed Firms
2011-01-17
Research Paper
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We determine the circumstances when the absence of public listing, often believed to be a disadvantage, makes a cooperative the unique efficient governance structure. This is established in a multi-task principal-agent model, capturing that cooperatives are not publicly listed and their CEOs have to bring the downstream enterprise to value as well as to serve upstream member interests. Not having a public listing prevents the CEO from choosing the level of the downstream activities too high. Cooperatives are uniquely efficient when the upstream marginal product multiplied with a function increasing in the strength of the chain complementarities is higher than the downstream marginal product.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- O32 : Management of Technological Innovation and R&D
- M : Business Administration and Business Economics; Marketing; Accounting
- M13 : New Firms; Startups
Automatically Extracted Terms
- cooperative
- member
- performance
- performance measure
- activity
- value
- action
- measure
- structure
- governance
- product
- governance structure
- level
- enterprise
- research
- chain
- result
- problem
- incentive
- f kf
