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Equity Management Practices in Italian Agricultural Cooperatives: A Cluster Analysis Approach

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  • Russo, Carlo
  • Sabbatini, Massimo

Abstract

In this paper, equity management practices of Italian agricultural cooperatives are described and discussed. Financial statements of 1.483 cooperatives are analyzed in order to provide empirical support to the study. Data confirm cooperative undercapitalization and disclose the existence of diversity in equity management practices even within the same business sector. Thus, in order to highlight the relations between cooperative market strategies and equity management practices a cluster analysis is proposed. Seven main strategic approaches for Italian cooperatives are identified and the emerging equity management practices are discussed. The empirical analysis supports the conclusion that a large number of Italian are implementing "perverse" approaches, such as dependence from public funding and minimization of equity and investments. Considering increasing competition, without an innovative equity management approach, the majority of the analyzed cooperative is expected to suffer of relevant competitive disadvantage.

Suggested Citation

  • Russo, Carlo & Sabbatini, Massimo, 2002. "Equity Management Practices in Italian Agricultural Cooperatives: A Cluster Analysis Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24802, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae02:24802
    DOI: 10.22004/ag.econ.24802
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    References listed on IDEAS

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    2. Barton, David G. & Parcell, Joseph L. & Featherstone, Allen M., 1997. "Optimal Capital Structure in Centralized Agricultural Cooperatives," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35809, Western Agricultural Economics Association.
    3. Peter Vitaliano, 1983. "Cooperative Enterprise: An Alternative Conceptual Basis for Analyzing a Complex Institution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 1078-1083.
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