EXPRESS: Financing and Farm-gate Pricing Strategies for Agricultural Cooperatives with Cash-constrained Farmers

IF 4.8 3区 管理学 Q1 ENGINEERING, MANUFACTURING
Xiaoyan Qian, Quan Zhou, T. Olsen
{"title":"EXPRESS: Financing and Farm-gate Pricing Strategies for Agricultural Cooperatives with Cash-constrained Farmers","authors":"Xiaoyan Qian, Quan Zhou, T. Olsen","doi":"10.1177/10591478241262279","DOIUrl":null,"url":null,"abstract":"Equity investment in agricultural cooperatives (co-ops) is typically limited to farmer-members; yet farmers are usually cash-constrained. In addition to the common stock that is held by farmer-members, many co-ops are changing their financial structure by raising equity from external investors. This helps co-ops to collect capital, but also brings to the fore the conflicting benefits of farmers and external investors. In this paper, we develop a two-stage game-theoretic model to examine a start-up co-op’s farm-gate pricing and financing strategies, considering two types of external fund: preferred stock that bears a fixed return rate and outside stock that shares the net profit (in proportion to equity) with common stock. We characterize the co-op’s strategies in different scenarios and generate the following insights. First, while both types of external equity outperform the case with common stock only, preferred stock generally outperforms outside stock due to its lower financial cost, higher tolerance for fund size limits, and flexibility in setting farm-gate prices. However, outside stock can outperform preferred stock if it allows a higher fund size limit. Second, the co-op’s financial strategy exhibits a similar structure in equilibrium regardless whether it is preferred stock or outside stock, despite their distinct financial terms. Finally, farm-gate pricing has a unique role in co-ops affecting the returns to farmers and external investors, which also highlights the conflicting roles of farmers as both patrons and investors when external equity is used.","PeriodicalId":20623,"journal":{"name":"Production and Operations Management","volume":null,"pages":null},"PeriodicalIF":4.8000,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Production and Operations Management","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1177/10591478241262279","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ENGINEERING, MANUFACTURING","Score":null,"Total":0}
引用次数: 0

Abstract

Equity investment in agricultural cooperatives (co-ops) is typically limited to farmer-members; yet farmers are usually cash-constrained. In addition to the common stock that is held by farmer-members, many co-ops are changing their financial structure by raising equity from external investors. This helps co-ops to collect capital, but also brings to the fore the conflicting benefits of farmers and external investors. In this paper, we develop a two-stage game-theoretic model to examine a start-up co-op’s farm-gate pricing and financing strategies, considering two types of external fund: preferred stock that bears a fixed return rate and outside stock that shares the net profit (in proportion to equity) with common stock. We characterize the co-op’s strategies in different scenarios and generate the following insights. First, while both types of external equity outperform the case with common stock only, preferred stock generally outperforms outside stock due to its lower financial cost, higher tolerance for fund size limits, and flexibility in setting farm-gate prices. However, outside stock can outperform preferred stock if it allows a higher fund size limit. Second, the co-op’s financial strategy exhibits a similar structure in equilibrium regardless whether it is preferred stock or outside stock, despite their distinct financial terms. Finally, farm-gate pricing has a unique role in co-ops affecting the returns to farmers and external investors, which also highlights the conflicting roles of farmers as both patrons and investors when external equity is used.
快讯:现金紧张型农民农业合作社的融资和农场交货定价策略
农业合作社(co-ops)的股权投资通常仅限于农民成员,但农民通常现金紧张。除了农民成员持有的普通股外,许多合作社还通过向外部投资者募集股权来改变其财务结构。这有助于合作社筹集资金,但也凸显了农民和外部投资者的利益冲突。在本文中,我们建立了一个两阶段博弈论模型来研究一个新成立合作社的农场门市定价和融资策略,并考虑了两种类型的外部资金:承担固定回报率的优先股和与普通股分享净利润(按股权比例)的外部股票。我们描述了合作社在不同情况下的策略,并得出以下结论。首先,虽然两种外部股票的表现都优于仅有普通股的情况,但优先股的表现通常优于外部股票,这是因为优先股的财务成本较低、对基金规模限制的容忍度较高,而且在确定农场入场价格方面具有灵活性。不过,如果允许较高的基金规模限制,外部股票的表现可能会优于优先股。其次,尽管优先股和外部股票的财务条款不同,但合作社的财务战略在均衡状态下表现出相似的结构。最后,农场门市定价在合作社中发挥着独特的作用,影响着农民和外部投资者的收益,这也凸显了在使用外部股权时,农民作为赞助人和投资者的角色冲突。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
Production and Operations Management
Production and Operations Management 管理科学-工程:制造
CiteScore
7.50
自引率
16.00%
发文量
278
审稿时长
24 months
期刊介绍: The mission of Production and Operations Management is to serve as the flagship research journal in operations management in manufacturing and services. The journal publishes scientific research into the problems, interest, and concerns of managers who manage product and process design, operations, and supply chains. It covers all topics in product and process design, operations, and supply chain management and welcomes papers using any research paradigm.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信