Abstract
We determine the circumstances when the absence of public listing, often believed to be a disadvantage, makes a cooperative the unique efficient governance structure. This is established in a multi-task principal-agent model, capturing that cooperatives are not publicly listed and their CEOs have to bring the downstream enterprise to value as well as to serve upstream member interests. Not having a public listing prevents the CEO from choosing the level of the downstream activities too high. Cooperatives are uniquely efficient when the upstream marginal product multiplied with a function increasing in the strength of the chain complementarities is higher than the downstream marginal product.
Original language | English |
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Pages (from-to) | 241-255 |
Number of pages | 15 |
Journal | European Review of Agricultural Economics |
Volume | 39 |
Issue number | 2 |
DOIs | |
Publication status | Published - 2012 |
Research programs
- RSM ORG