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Agricultural firm survival: The case of farmer cooperatives in the United States
Author(s) -
Grashuis Jasper
Publication year - 2019
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21612
Subject(s) - leverage (statistics) , agriculture , market liquidity , asset (computer security) , intangible asset , hazard model , business , economics , agribusiness , hazard , finance , actuarial science , ecology , computer security , machine learning , computer science , biology , chemistry , organic chemistry
The number of farmer cooperatives in the United States is declining, but empirical investigations of cooperative firm survival have been scarce. With demographic, financial, and strategic characteristics as possible explanations, we conduct survival analysis in relation to 950 U.S. farmers cooperatives for the 2005–2018 period. Following the results of our Cox proportional hazard regressions, we find (a) relatively young and old farmer cooperatives are more susceptible to exit; (b) the relationship of membership size to the survival rate of farmer cooperatives is U‐shaped; (c) farmer cooperatives with intangible asset portfolios have lower survival probabilities; and (d) the survival function of farmer cooperatives is not explained significantly by efficiency, leverage, or liquidity. Overall, we use our findings to inform recommendations in terms of cooperative firm behavior, in particular in relation to member heterogeneity and strategic orientation.