IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v87y2016i1p117-135.html
   My bibliography  Save this article

WHAT DETERMINANTS AFFECT THE CAPITAL STRUCTURE OF CONSUMER CO-OPERATIVES? THE CASE OF iCOOP KOREA

Author

Listed:
  • Jinseon SEO
  • Woosuk CHOI

Abstract

he capital structure of co-operatives can differ from that of IOB (Investor-Owned Businesses) since the two organizations differ in their aims, governance structures and decision-making principles. This paper examines whether the determinants verified in IOB affect the leverage ratio of consumer co-operatives. Consumer co-operatives in South Korea have been rapidly growing during the last decade. There are two leading theories in finance that explain capital structure: the trade-off and pecking order theories. Focusing on consumer co-operatives in South Korea, the paper aims to analyze empirically what determinants have effect on the capital structure of consumer co-operatives and which of the two theories is more plausible. This study reveals that profitability and firm size have a significantly negative effect on leverage while tangibility and growth have a significantly positive effect on it. In conclusion, it seems that neither of the theories above perfectly accounts for the capital structure of consumer co-operatives because of the differences in governance characteristics between consumer co-operatives and IOB as well as in the costs of bankruptcy, agency, informational asymmetry and securities issuance.

Suggested Citation

  • Jinseon SEO & Woosuk CHOI, 2016. "WHAT DETERMINANTS AFFECT THE CAPITAL STRUCTURE OF CONSUMER CO-OPERATIVES? THE CASE OF iCOOP KOREA," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 87(1), pages 117-135, December.
  • Handle: RePEc:bla:annpce:v:87:y:2016:i:1:p:117-135
    as

    Download full text from publisher

    File URL: http://onlinelibrary.wiley.com/doi/10.1111/apce.2016.87.issue-1/issuetoc
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Jinseon Seo & Woosuk Choi, 2021. "Classification of co‐operative member shares as equity or liabilities: The case of consumer co‐operatives in South Korea," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 283-305, June.
    2. Kasım Kiracı & Nurhan Aydin, 2018. "Factors that Determine the Capital Structure: An Empirical Study on Low-cost Airlines," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 65(3), pages 227-246, September.
    3. Eric Bidet & Hyungsik Eum, 2022. "Une analyse socio‐économique de la trajectoire institutionnelle de l'entreprise sociale : le cas de la Corée du Sud," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(1), pages 229-247, March.

    More about this item

    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:bla:annpce:v:87:y:2016:i:1:p:117-135. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    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.