Enterprise forms, ownership markets, and capital procurement of the firm.

It is often argued that cooperative firms are financially less viable than investor-owned firms. From a fundamental point of view, however, this does not seem a fair comparison, since the market for firm ownership is usually only available to investor-owned firms in our economy. This paper examines potential roles of the market for ownership rights to cooperative firms, particularly in capital procurement of the firm. We show that, with a wellfunctioning membership market, consumer cooperatives are not necessarily financially weaker than investor-owned firms. The consumer cooperative can thus be a promising alternative to the investor-owned firm when the latter type of the firm induces some serious market failure in the product market