The impact of cooperatives' risk aversion and equity capital constraints on their inter-firm consolidation and collaboration strategies-with an empirical study of the European dairy industry

Dirk van der Krogt, Jerker Nilsson and Viggo Høst
Additional contact information
Dirk van der Krogt: Department of Economics, Swedish University of Agricultural Sciences, SE-75007 Uppsala, Sweden, Postal: Department of Economics, Swedish University of Agricultural Sciences, SE-75007 Uppsala, Sweden
Jerker Nilsson: Department of Economics, Swedish University of Agricultural Sciences, SE-75007 Uppsala, Sweden, Postal: Department of Economics, Swedish University of Agricultural Sciences, SE-75007 Uppsala, Sweden
Viggo Høst: School of Economics and Management, University of Aarhus, DK-8000 Aarhus C, Denmark, Postal: School of Economics and Management, University of Aarhus, DK-8000 Aarhus C, Denmark

Agribusiness, 2007, vol. 23, issue 4, 453-472

Abstract: This article concludes that cooperative firms' choice of interfirm consolidation and collaboration strategies can be explained by two attributes, inherent in the cooperative business form, namely, risk aversion and equity capital constraints. Empirical data originate from the 15 largest EU dairy firms during a 5-year period (1998-2002). In total 198 activities are identified. They are classified into six categories: (a) mergers, (b) acquisitions, (c) strategic share holdings, (d) joint ventures, (e) licensing, and (f) general collaboration agreements. It is shown that cooperative firms prefer mergers, collaboration agreements, joint ventures, and licensing. All of these are relatively low in terms of both performance risks and relational risks, and they demand limited amounts of equity capital. Investor-owned firms focus on take-over strategies-acquisitions and share holdings. Other indicators of risk aversion are that cooperatives tend to collaborate with other cooperatives and that they prefer partners in their own home market. [EconLit: Q130; P130; L200.] © 2007 Wiley Periodicals, Inc. Agribusiness 23: 453-472, 2007.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://hdl.handle.net/10.1002/agr.20140 Link to full text; subscription required (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:23:y:2007:i:4:p:453-472

DOI: 10.1002/agr.20140

Access Statistics for this article

Agribusiness is currently edited by Ronald W. Cotterill

More articles in Agribusiness from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().