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Effects Of Managers' Power On Capital Structure: A Study On Italian Agricultural Cooperatives

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  • Russo, Carlo
  • Weatherspoon, Dave D.
  • Peterson, H. Christopher
  • Sabbatini, Massimo

Abstract

Excessive leverage is one of the most important problems facing Italian agricultural cooperatives as the competition in the EU intensifies. An empirical study of 500 agricultural cooperatives supports the hypothesis that cooperatives characterized as having "powerful managers" have a capital structure that is significantly different from the "nonpowerful manager" cooperatives. Powerful manager cooperatives were less leveraged and had a long term strategy that focused on minimizing financial risk by increasing their equity/asset ratio. The result of this strategy is an increased probability of long term international competitiveness.
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Suggested Citation

  • Russo, Carlo & Weatherspoon, Dave D. & Peterson, H. Christopher & Sabbatini, Massimo, 1999. "Effects Of Managers' Power On Capital Structure: A Study On Italian Agricultural Cooperatives," Staff Paper Series 11753, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:11753
    DOI: 10.22004/ag.econ.11753
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    References listed on IDEAS

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    1. Robert A. Collins, 1985. "Expected Utility, Debt-Equity Structure, and Risk Balancing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 627-629.
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    4. Cook, Mike, 1993. "Cooperatives and Group Action," Food and Agricultural Marketing Issues for the 21st Century - FAMC 1993 Conference 265931, Food and Agricultural Marketing Consortium (FAMC).
    5. 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.
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    Cited by:

    1. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 18942, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. Rebelo, Joao & Caldas, Jose Vaz & Matulich, Scott C., 2008. "Manager Power, Member Behavior and Capital Structure: Portuguese Douro Wine Cooperatives," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 9(2), pages 1-11, July.
    3. Elena MELIA-MARTI & Ana Maria MARTINEZ-GARCIA, 2015. "Characterization And Analysis Of Cooperative Mergers And Their Results," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(3), pages 479-504, September.
    4. Arcas-Lario, Narciso & Martín-Ugedo, Juan Francisco & Mínguez-Vera, Antonio, 2014. "Farmers’ Satisfaction with Fresh Fruit and Vegetable Marketing Spanish Cooperatives: An Explanation from Agency Theory," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(1), pages 1-20, February.
    5. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    6. Marcos-Matas, Gustavo & Ruggeri, Arianna & Ghelfi, Rino, 2018. "The Role of Members' Commitment on Agri-Food Co-Operatives' Capitalization, Innovation and Performance," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), March.
    7. Stranieri, Stefanella & Orsi, Luigi & De Noni, Ivan & Olper, Alessandro, 2023. "Geographical Indications and Innovation: Evidence from EU regions," Food Policy, Elsevier, vol. 116(C).
    8. Theo Benos & Nikos Kalogeras & Frans J.H.M. Verhees & Panagiota Sergaki & Joost M.E. Pennings, 2016. "Cooperatives’ Organizational Restructuring, Strategic Attributes, and Performance: The Case of Agribusiness Cooperatives in Greece," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 127-150, January.
    9. repec:vuw:vuwscr:18942 is not listed on IDEAS

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