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Equity Capital and Restructuring of Cooperatives as Investor-Oriented Firms

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  • Schrader, Lee F.

Abstract

The inability of financially successful cooperatives to recognize appreciation of patron’s equity creates a dilemma for cooperative members. The value of an enterprise as an investor-oriented firm may exceed the value of patron’s participation in a limited patronage horizon. This difference has been a factor in the decision of several cooperatives to restructure wholly or partially as investor-oriented firms. Reasons for valuation differences are discussed and related to six cases of cooperative restructuring.

Suggested Citation

  • Schrader, Lee F., 1989. "Equity Capital and Restructuring of Cooperatives as Investor-Oriented Firms," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 4, pages 1-13.
    • Handle: RePEc:ags:joagco:46219
    DOI: 10.22004/ag.econ.46219
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    Citations

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    Cited by:

    1. Fabio R. Chaddad & Michael L. Cook, 2004. "The Economics of Organization Structure Changes: a US perspective on demutualization," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(4), pages 575-594, December.
    2. Chaddad, Fabio Ribas, 2006. "Investment Constraints in Agricultural Cooperatives: Theory, Evidence and Solutions," 44th Congress, July 23-27, 2006, Fortaleza, Ceará, Brazil 143259, Sociedade Brasileira de Economia, Administracao e Sociologia Rural (SOBER).
    3. Zvi Lerman & Claudia Parliament, 1993. "Financing Growth in Agricultural Cooperatives," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(3), pages 431-441.
    4. Peter Foreman & David A. Whetten, 2002. "Members' Identification with Multiple-Identity Organizations," Organization Science, INFORMS, vol. 13(6), pages 618-635, December.
    5. Stofferahn, Curtis W., 2010. "South Dakota Soybean Processors: The Discourse of Conversion from Cooperative to Limited Liability Corporation," Journal of Cooperatives, NCERA-210, vol. 24, pages 1-33.
    6. Jiri Hejkrlik & Petra Chaloupkova & Tetyana Sokolska, 2023. "The role of transformational leadership and leaders’ skills for new agricultural cooperatives in post‐soviet countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 109-129, March.
    7. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    8. Parliament, Claudia & Lerman, Zvi, 1993. "Risk and Equity in Agricultural Cooperatives," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 8, pages 1-14.
    9. Collins, Robert A., 1991. "The Conversion Of Cooperatives To Publicly Held Corporations: A Financial Analysis Of Limited Evidence," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-5, December.
    10. Thembi Xaba & Nyankomo Marwa & Babita Mathur-Helm, 2018. "Efficiency and Profitability Analysis of Agricultural Cooperatives in Mpumalanga, South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(6), pages 1-10.
    11. Mooney, Patrick & Gray, Thomas W., 2002. "Cooperative Conversion and Restructuring in Theory and Practice," Research Reports 280024, United States Department of Agriculture, Rural Development.
    12. Ortmann, Gerald F. & King, Robert P., 2007. "Agricultural Cooperatives I: History, Theory and Problems," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(1), pages 1-29, March.

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    Agribusiness;

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