University of Wisconsin Center for Cooperatives
Journal of Agricultural Cooperation

Title Risk and Equity in Agricultural Cooperatives
Author(s) Claudia Parliament and Zvi Lerman
Series Volume 8
Issue Date 1993
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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