Governance Control Mechanisms in Portuguese Agricultural Credit Cooperatives

Paula Cabo and Joao Rebelo

No 24623, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: Over the last decade Portuguese Agricultural Credit Cooperatives (ACCs) have increasingly face survival challenges related to their difficulty in gathering equity. The main source of ACCs equity is the net benefit; thus, understanding how ACCs governance can work on correcting bad economic performance is of crucial importance to overcome this constraint. The main objective of this paper is to describe the governance control mechanisms in the ACCs. Five governance mechanisms are identified: board and chairman change (internal mechanisms), central ACC intervention by an agent or by management board replacement and merger. Empirical analysis proved that the internal governance mechanisms activity is not related to the ACC performance. Additionally: (a) ACCs with a central ACC agent and merged ACCs hold a weaker credit management and a heavy administrative costs structure and profitability problems; and (b) ACCs with a management board replacement by the central ACC hold a weaker credit management and present solvency problems.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 15
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/24623/files/pp05ca01.pdf (application/pdf)

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:ags:eaae05:24623

DOI: 10.22004/ag.econ.24623

Access Statistics for this paper

More papers in 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().