Desert Places: Cooperatives as Infrastructure Providers in Marginalized Areas

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See all articles by Hyoju Jeong

Hyoju Jeong

University of Minnesota - Twin Cities - Carlson School of Management

Aseem Kaul

University of Minnesota - Minneapolis

Jiao Luo

University of Minnesota - Twin Cities - Carlson School of Management

Date Written: June 15, 2020

Abstract

In this study, we examine the comparative advantage of cooperatives relative to for-profit firms in infrastructure provision. We argue that infrastructure projects generate positive local externalities for the communities in which they are located, and that cooperatives, being able to internalize these benefits, may be willing to provide higher quality infrastructure than for-profits, especially in marginalized communities where the costs of provision are high relative to revenues. We test and find support for this argument in US internet broadband provision from 2014 to 2017, showing that cooperatives are more likely to provide internet in communities where for-profits offer poor quality service, with these effects being stronger in rural communities, communities with persistent poverty, and communities with high social cohesion.

Keywords: cooperatives, public-private, comparative governance, digital inequality, infrastructure provision

JEL Classification: D22, P13, H4, L3, O18

Suggested Citation

Jeong, Hyoju and Kaul, Aseem and Luo, Jiao, Desert Places: Cooperatives as Infrastructure Providers in Marginalized Areas (June 15, 2020). Available at SSRN: https://ssrn.com/abstract=

Hyoju Jeong (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Aseem Kaul

University of Minnesota - Minneapolis ( email )

321, 19th Avenue S
3-412 Carlson School of Management
Minneapolis, MN 55455
United States

Jiao Luo

University of Minnesota - Twin Cities - Carlson School of Management ( email )

321 19th Ave. S
CSOM 3-360
Minneapolis, MN 55455
United States
1-612-626-1907 (Phone)

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