RISK AND EQUITY IN AGRICULTURAL COOPERATIVES

Claudia Parliament, Zvi Lerman () and Dana Huseby

No 14032, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: This research examines the effects of risk-related factors on the proportion of equity held by agricultural cooperatives. The empirical analysis indicates that capital structure is significantly affected by the level and variation of profitability, commodities handled, and market function. The proportion of equity is not affected by size or pooling. Contrary to expectations, the results indicate an inverse relation between profit variability and the proportion of equity. Cooperatives rely on profit for equity accumulation through retained earnings. If this source of equity is unstable, the cooperative may not be able to generate sufficient equity causing the estimated inverse relationship.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 16
Date: 1991
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https://ageconsearch.umn.edu/record/14032/files/p91-37.pdf (application/pdf)

Related works:
Journal Article: Risk and Equity in Agricultural Cooperatives (1993)
Working Paper: Risk and Equity in Agricultural Cooperatives (1992)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:14032

DOI: 10.22004/ag.econ.14032

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