IDEAS home Printed from https://ideas.repec.org/a/ags/jlcoop/56886.html
   My bibliography  Save this article

The Restructuring of the Saskatchewan Wheat Pool: Overconfidence and Agency

Author

Listed:
  • Fulton, Murray E.
  • Larson, Kathy A.

Abstract

This paper examines how agency problems combined with overconfidence and hubris by coop management lead to financial failure in the Saskatchewan Wheat Pool. As a consequence of both of these problems, the Pool made poor investment decisions and ended up in severe financial difficulties. These problems were exacerbated by three additional factors: (1) ownership and control were separated via an A-B share structure, leading to a situation where neither farmer members nor investors had an incentive to monitor management activities; (2) the sheer volume of investment activity undertaken made it virtually impossible for the board to stay on top of what was happening; and (3) as a result of the change financial structure, senior management had available a large amount of debt capital that it could spend.

Suggested Citation

  • Fulton, Murray E. & Larson, Kathy A., 2009. "The Restructuring of the Saskatchewan Wheat Pool: Overconfidence and Agency," Journal of Cooperatives, NCERA-210, vol. 23, pages 1-20.
    • Handle: RePEc:ags:jlcoop:56886
    DOI: 10.22004/ag.econ.56886
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/56886/files/FultonLangSWP.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.56886?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hakelius, Karin & Hansson, Helena, 2016. "Members’ attitudes towards cooperatives and their perception of agency problems," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(4), October.
    2. Serfas, D., 2018. "an ex-post econometric analysis of the abolishment of the canadian wheat board," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277286, International Association of Agricultural Economists.
    3. Fulton, Murray & Giannakas, Konstantinos, 2012. "The Value of a Norm: Open Membership and the Horizon Problem in Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2), pages 1-18.
    4. Fulton, Murray & Larson, Kathy A., 2009. "Overconfidence and Hubris: The Demise of Agricultural Co-operatives in Western Canada," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2), pages 1-35.
    5. Constantine Iliopoulos & Vladislav Valentinov, 2018. "Member Heterogeneity in Agricultural Cooperatives: A Systems-Theoretic Perspective," Sustainability, MDPI, vol. 10(4), pages 1-22, April.
    6. Iliopoulos, Constantine & Valentinov, Vladislav, 2018. "Member heterogeneity in agricultural cooperatives: A systems-theoretic perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10(4), pages 1-22.
    7. Hogeland, Julie A., 2013. "From Agrarian to Global Values: How 20th Century U.S. Agricultural Cooperatives Came to Terms with Agricultural Industrialization," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 41(2), pages 1-18.
    8. Olimov, Jafar, 2014. "Cooperatives and the Risk Aversion of Farmers," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170833, Agricultural and Applied Economics Association.
    9. Lamprinakis, Lampros & Fulton, Murray E., 2011. "Mental Frames and Organizational Decision-making: Facing the Challenges of Change," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114407, European Association of Agricultural Economists.
    10. Imanol Basterretxea & Chris Cornforth & Iñaki Heras-Saizarbitoria, 2022. "Corporate governance as a key aspect in the failure of worker cooperatives," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(1), pages 362-387, February.

    More about this item

    Keywords

    Agribusiness; Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlcoop:56886. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/daksuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.