Performance of traditional cooperatives: the portuguese Douro wine cooperatives

João Rebelo

Portugal

University of Trás-os-Montes and Alto Douro (UTAD)

Department of Economics, Sociology and Management (DESG) and CETRAD University of Trás-os-Montes and Alto Douro (UTAD)

José Caldas

Portugal

University of Trás-os-Montes and Alto Douro (UTAD)

Department of Economics, Sociology and Management (DESG) and CETRADUniversity of Trás-os-Montes and Alto Douro (UTAD)

Scott C. Matulich

United States

Washington State University

School of Economic Sciences

Submitted: 2016-03-04

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Accepted:

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Published: 2011-10-08

DOI: https://doi.org/10.7201/earn.2010.02.07
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Keywords:

Econometric model, Economic analysis, Traditional cooperatives, Wine sector

Supporting agencies:

This research was not funded

Abstract:

Globalization is challenging the very core of cooperative governance and ownership decision, especially in Southern European countries, like Portugal, where a large number of producers are organized in traditional and Mediterranean-style agricultural cooperatives. This paper analyses the effects of governance and control variables related with size over two alternative indicators of performance: revenues transferred to members/patrons and capital structure. The results suggest that these cooperatives have difficulties being sustainable in the more competitive global wine markets, if they follow, essentially, a practice of maximum patronage refund, reducing their capacity to improve leverage and to finance more profitable, but risky, long run investments.
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