On the Nature of a Cooperative: A System of Attributes Perspective

Li Feng and George Hendrikse

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: In the 1950s and 1960s there was a debate about the nature of an agricultural cooperative: the cooperative as extension of the farm, the cooperative as vertical integration or the cooperative as a firm. We revisit this debate with various concepts from the theory of the firm that have been formulated since 1990. Two concepts shed light on this debate: the enterprise as a system of attributes and the delineation of a governance structure in terms of ownership rights, control rights and income rights. We argue that viewing the cooperative as a system of attributes integrates these three views. It emphasizes that a cooperative is a firm in itself, with many input suppliers as owners. The feature of many input suppliers as owners implies that the behavioral differences between a cooperative and an investor owned firm have to be addressed by highlighting the unique aspects of the stakeholder owning the enterprise.

Keywords: cooperative; extension of the farm; governance; vertical integration (search for similar items in EconPapers)
JEL-codes: L2 M M13 O32 (search for similar items in EconPapers)
Date: 2007-12-19
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Citations: View citations in EconPapers (1)

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