Financial Behavior of Cooperatives and Investor-Owned Firms: An Empirical Analysis in the Spanish Fruit and Vegetable Sector

Abstract

A Partial Adjustment model has been formulated in order to compare the financial ratios between cooperatives and investor-owned firms from a dynamic perspective. Empirical results from a sample of Spanish fruit and vegetable firms during 2009-2012 reveal significant differences in the adjustment process of current and debt ratios between cooperatives and investor-owned firms. These findings may be motivated by the weakness associated with ownership structure in cooperatives that reduces their adjustment processes as compared to investor-owned firms. The identification of differences in adjustment process between cooperatives and investor-owned firms may provide us with additional information about the specific management characteristics of these agri-food firms, identifying more dependent firms to the external market conditions.