The Conversion of Cooperatives to Publicly Held Corporations: A Financial Analysis of Limited Evidence

Recent reorganizations of agricultural cooperatives have created concern that the cooperative form of business may not be well suited to the agribusiness environment of the 1990s. Potential institutional changes in the cooperative form of organization require objective analysis of the etiology of these reorganizations. Previous research evaluated internal features of the cooperative that may create economic incentives to convert the co-op to a corporation. This article focuses on external factors that may also be related to cooperative conversions. Informal evaluation of the limited evidence suggests that these factors merit further study. Key words: cooperatives, finance, risk. In recent years five large, successful American agricultural cooperatives have followed the lead of a group of Irish dairy co-ops by taking on characteristics of publicly held corporations. These financial reorganizations have taken several different forms. American Rice con-verted directly from an agricultural marketing cooperative to a publicly held corporation i