| Abstract |
This research examines the effect of risk on the proportion of equity
held by agricultural cooperatives. The measured components of risk are
business risk and the financial risk that is dependent on the proportion
of debt in the cooperative’s capital structure. The empirical results indicate
the proportion of equity is inversely related to financial risk and positively
related to business risk. These risk effects are estimated to differ based
on the commodity handled by the cooperative. No significant relation between
the proportion of equity and whether or not cooperative operates on a pooling
basis is estimated. |
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