Incentives to Efficient Investment Decisions in Agricultural Cooperatives

Authors:
Russo, Carlo
Sabbatini, Massimo
Type: Conference Paper
Journal title: Contributed Paper
Year of publication: 2005
Source: AgEcon
Collected from: AGRIS
Subject:
cooperatives
agribusiness and cooperatives
:

Recent studies have questioned the competitiveness of agricultural cooperatives in an industrialized food system, based on empirical results and economic theory. New organizational institutions have been proposed to overcome the cooperative main weaknesses (the so called new generation cooperatives). In this paper, we provide a simple model based on a financial approach to address the issue of cooperative competitiveness and to assess the investment efficiency of both traditional and new generation cooperatives. The main conclusions of the analysis are: i) cooperatives (both traditional and new generation ones) may have incentive to adopt projects that do not maximize the Net Present Value of the firm ii) the institutions of new generation cooperatives are not sufficient to ensure net present value maximization, even though they address some of the main concerns of traditional cooperatives iii) traditional cooperatives may have a competitive advantage in businesses that require the aggregation of a large number of farmers.

 

Related Resources

Beginning to inform the theory of the cooperative firm: Emergence of the new generation cooperative

Provider: 
Subject: 
agricultural development
cooperatives
agribusiness and cooperatives

Stakeholder Participation in Co-operative Capital in Western Agricultural Co-operatives

Provider: 
Subject: 
policies
agricultural policies
agricultural development
cooperatives
agribusiness and cooperatives

New producer strategies: the emergence of patron-driven entrepreneurship

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives

Agricultural cooperatives and gender equality

Provider: 
Subject: 
agribusiness and cooperatives
cooperatives
Collected from: 

Report on the Country-Level Workshops on Appropriate Management Systems for Agricultural Cooperatives - AMSAC [Asia and Pacific Region].

Provider: 
Subject: 
agribusiness and cooperatives
cooperatives
Collected from: 

EFFECTS OF MANAGERS' POWER ON CAPITAL STRUCTURE: A STUDY OF ITALIAN AGRICULTURAL COOPERATIVES

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives
Collected from: 

AGRERI Library

Beginning to inform the theory of the cooperative firm: Emergence of the new generation cooperative

Provider: 
Subject: 
agricultural development
cooperatives
agribusiness and cooperatives

Stakeholder Participation in Co-operative Capital in Western Agricultural Co-operatives

Provider: 
Subject: 
policies
agricultural policies
agricultural development
cooperatives
agribusiness and cooperatives

New producer strategies: the emergence of patron-driven entrepreneurship

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives

External Library

Agricultural cooperatives and gender equality

Provider: 
Subject: 
agribusiness and cooperatives
cooperatives
Collected from: 

Report on the Country-Level Workshops on Appropriate Management Systems for Agricultural Cooperatives - AMSAC [Asia and Pacific Region].

Provider: 
Subject: 
agribusiness and cooperatives
cooperatives
Collected from: 

EFFECTS OF MANAGERS' POWER ON CAPITAL STRUCTURE: A STUDY OF ITALIAN AGRICULTURAL COOPERATIVES

Provider: 
Subject: 
cooperatives
agribusiness and cooperatives
Collected from: