Co‐Op Open Membership: Economic and Financial Effects

18 Pages Posted: 28 Apr 2020

Date Written: December 2019

Abstract

This paper aims to analyze the objectives pursued by cooperatives upon opening doors to new members and how this affects business activity and financial indicators. Surprisingly, the results show that accepting new partners makes no positive impact on the return on assets, but it does make a variable impact on financial indicators according to the type of cooperative. Distinguishing between agricultural and worker co‐ops, we conduct a cross‐sectional study of a sample of Galician cooperatives to find whether they apply this principle the same way regardless of membership size. Our results corroborate that cooperatives apply the principle differently. This not only allows us to extract other relevant information from accounting for cooperatives, but it also permits other agents like financial entities to obtain indicators that reflect the true company image more adequately.

Keywords: Cooperative principles, Business size, Business activity, Capital structure, Financial participation, Galicia

JEL Classification: P13, M21, M40, J54, G39

Suggested Citation

Cabaleiro-Casal, María José and Iglesias-Malvido, Carlos and Martínez-Fontaíña, Rocío, Co‐Op Open Membership: Economic and Financial Effects (December 2019). Annals of Public and Cooperative Economics, Vol. 90, Issue 4, pp. 669-686, 2019, Available at SSRN: https://ssrn.com/abstract=3586888 or http://dx.doi.org/10.1111/apce.12256

María José Cabaleiro-Casal (Contact Author)

University of Vigo

E.U. de Enx. Técn. Industrial.
Vigo, E-36200
Spain

Carlos Iglesias-Malvido

University of Vigo

E.U. de Enx. Técn. Industrial.
Vigo, E-36200
Spain

Rocío Martínez-Fontaíña

University of Vigo ( email )

E.U. de Enx. Técn. Industrial.
Vigo, E-36200
Spain

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