Agricultural cooperatives: economics and capital structure

This study discusses about agricultural cooperatives capital structure with the New Institutional Economics approach, in particular the Transaction Costs Economics point of view. At the end, it is possible to conclude that the co-operative enterprise, as a consequence of the financial governance costs, presents a wider structure of transaction and agency costs, when compared to the other forms of business organization. An econometric model and graphic analyses area elaborated showing that when the co-operative is a smaller proportions organization it presents lower financial governance costs, however, when it develops, the transaction and financial governance costs also grow, and the co-operative displays higher costs than the non-cooperative enterprises. This issue also shows that Transaction Costs Economics theory is efficient tool to explain the organizational capital structure and the micro-analytical details not yet appreciated by the usual analyses.