Testing capital structure theories for agricultural cooperatives

Cheng, Yuxi (Lance) and Ani Katchova

International Food and Agribusiness Management Review, 2018, vol. 22, issue 01

Abstract: This study investigates adjustments in capital structures for agricultural cooperatives and differences before and during the agricultural downturn which started in 2013. We estimate a simultaneous equation model to test for cooperatives’ capital structure strategies based on two main theories from the corporate finance literature: the trade-off theory and the pecking order theory. Estimation results reveal that agricultural cooperatives in the U.S. generally adjust to short-term financial targets for equity and debt, supporting the trade-off theory while there is little support for the pecking order theory within the agricultural cooperatives sector.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifaamr:284922

DOI: 10.22004/ag.econ.284922

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