Cooperative mergers and acquisitions: The role of capital constraints

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28 Scopus citations


Several explanations for merger activity exist for publicly traded firms, but none consider the unique aspects of cooperatives. This study develops a test for the hypothesis that cooperative consolidation occurs primarily in response to capital constraints associated with a lack of access to external equity capital. An empirical model estimates the shadow value of long-term investment capital within a multinomial logit model of transaction choice in a panel data set of the 100 largest U.S. cooperatives. The results substantially confirm the capital-constraint hypothesis. Thus, the primary implication is that internal growth may be a more viable alternative to consolidation if new forms of cooperative financing are developed.

Original languageEnglish (US)
Pages (from-to)152-168
Number of pages17
JournalJournal of Agricultural and Resource Economics
Issue number1
StatePublished - Apr 1 2003


  • Capital structure
  • Cooperative
  • Discrete choice
  • Joint ventures
  • Mergers
  • Multinomial logit
  • Strategic alliances

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics


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