Capital procurement of a consumer cooperative: Role of the membership market

Kazuhiko Mikami

Economic Systems, 2010, vol. 34, issue 2, 178-197

Abstract: Cooperative firms are commonly thought to be financially weak and unable to flourish in the market economy. This paper addresses the idea that a consumer cooperative issues a membership, which represents an ownership share in the cooperative, as a method of procuring equity capital. It then shows that, in theory, consumer cooperatives are not necessarily financially weaker than investor-owned firms in the presence of a membership market. This implies that the consumer cooperative is potentially a promising alternative to the investor-owned firm when the latter type of firm induces serious market failure in the product market.

Keywords: Consumer; cooperative; Capital; procurement; Membership; market (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:34:y:2010:i:2:p:178-197

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