Marketing Cooperatives and Financial Structure

19 Pages Posted: 3 Feb 2003

See all articles by George W.J. Hendrikse

George W.J. Hendrikse

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Cees P. Veerman

Wageningen University

Date Written: December 2000 5,

Abstract

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: marketing cooperative, finance, transaction costs economics

JEL Classification: M, M10, L2, D2, G3

Suggested Citation

Hendrikse, George W.J. and Veerman, Cees P., Marketing Cooperatives and Financial Structure (December 2000 5,). Available at SSRN: https://ssrn.com/abstract=370812

George W.J. Hendrikse (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Cees P. Veerman

Wageningen University ( email )

Hollandseweg 1
6700 HB Wageningen, 6706KN
Netherlands

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