Acknowledgements
Participation: a Co-operative Dilemma?
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Economies of Scale Versus Participation: a Co-operative Dilemma? Jones, D.C.; Kalmi, P. 55 JEOD - Vol.1, Issue 1 (2012) group. While some of these changes, e.g. new types of firms and new categories of membership, may be viewed as representing movements away from the founders’ ideals, we argue that it is too early to determine whether they represent fundamental changes or not. Thus to date the jury is out on whether the evidence is supportive of some aspects of the claim in this case. Moreover, to deal with emerging challenges, the group has continued to demonstrate an ability to innovate and to make institutional adjustments. Furthermore, there is evidence that many of the developments that appear to represent departures from the founder’s ideals are not likely to be sustained, but rather may turn out to be temporary phenomena. This is most clearly the case with Eroski and its on-going strategy of co-operativization. There is also evidence that firms that begin as mixed cooperatives soon assume a traditional cooperative organizational form. Evidence against the alleged inexorable trade-off between democracy and efficiency and that as a result, all co-operatives must be considered organizations that are necessarily unsustainable, is also found from the experiences of co-op banks in Finland. For example, changes have already been made and also continue to be made to enhance the provision of services to members and to substantially expand the membership base. in addition, the nature of the co-op bank group continues to evolve in ways that are responsive to the needs of individual co-ops. At the same time we are aware that our paper represents only a preliminary first step in systematic research of this topic and that substantial additional work is needed. As others have noted, there exists a keen need for fresh theoretical perspectives concerning diverse aspects of co-operative governance including the role of boards of directors in co-operatives (Cornforth, 2004), the changing role of social capital in co-operatives (Nilsson et al., 2012) and the determinants of co-operative membership (Jones, Jussila and Kalmi, 2009). We also note that in this paper our institutional discussion focuses on only two cases. Not only is it dangerous to generalize from such a slim empirical base, but we are aware that co-operative history is littered with co-op cases that have disappeared-e.g. in the US, producer cooperatives in sectors including barrel-making and plywood and in the UK, the long-established producer co-operatives. 27 Undoubtedly in some of these and other cases there may have been many failures in trying to deal with the challenges posed by balancing the potentially competing needs for democracy and scale economies. Equally we are aware of other cases that continue to succeed. For example, besides the Finnish case there are many other examples of successful co-operative financial institutions - e.g. see Chaves et al, 2008 for a discussion of the Spanish case. Elsewhere prominent examples of successful co-ops include the Lega and social coops in italy and the SCOP coops in France. it follows that one key task is to try to develop a comprehensive (global) data base of co-op cases, past and present, where one can confidently determine whether or not cases were able to succeed and avoid degeneration. A second task is to better understand what accounts for success and failure. What accounts for the demonstrated abilities of Finnish co-op banks and Mondragon to continuously develop institutional responses to potential tradeoffs between democratic challenges and scale economies? For example, what are the underlying mechanisms that need to come into play to facilitate appropriate democratic control of managers by members? Do the Finnish and Mondragon cases reflect unique cultural factors which, in turn, mean that there are factors that arguably cannot easily be transferred to other co-ops? Since the two cases are so different in crucial respects, our sense is that this limited transferability point is not a compelling one and there are many opportunities for their innovative approaches to corporate governance to be emulated. Equally, the available evidence would appear to suggest that isolated co-op cases (the norm with most US PCs) typically experience substantially greater difficulties in thwarting degeneration than do networked co-ops which usually have developed supporting structures. 27 See, for example, Jones (1980). Economies of Scale Versus Participation: a Co-operative Dilemma? Jones, D.C.; Kalmi, P. 56 JEOD - Vol.1, Issue 1 (2012) Appendix: Table 1: Mainly Econometric Studies that furnish evidence on economies/diseconomies of scale in co-operatives
2011
Jones and Kalmi
Finnish cooperative banks Panel data for population of all Finnish banks from the first half of the 2000s What is the impact of co-op membership on performance at Finnish banks? Estimate fixed effects production functions Find evidence on diseconomies of scale for Finnish cooperative banks in the first half of the 2000s 2011
Wheelock and
Wilson U.S. credit unions Random
sample; Annual
observations from 1989-2006 on all non- corporate credit unions Are there economies of scale present in U.S. credit unions? Is the current average size of credit unions smaller than what would be efficient? Implications for policy and regulation on credit unions? Non-parametric local-linear estimator for cost relationship; ray-scale and expansion-path economies; dimension- reduction technique with bootstrap methods Find significant evidence of increasing returns to scale across range of sizes observed among credit unions; Suggests easing regulation on credit union membership or activity would further increase size of credit unions; Wheelock and Wilson (2008) finds large banks have experienced larger increases in productivity than small banks over the past 20 years 2011
Wilcox and
Dopico U.S. credit unions Random
sample; Credit union mergers, 1984- 2009; expense & revenue data, 5 yrs after merger Common rationale is larger banks are more efficient (lower operating costs), but evidence for improvement is not compelling. Yet, annual % of credit unions that merge remained the same. Data analysis provided by Dopico and Wilcox (2009) and (2010) Mergers usually improve credit union cost efficiency (economies of scale); benefits include lower loan, higher deposit rates; credit union mergers have shifted over time to also benefit acquirers; Large acquirer + normal target = benefits for target, none for acquirer; Normal acquirer + normal target = more equal benefit sharing 2009
Japanese cooperative banks (Shinkin & credit cooperatives) Random
sample; 2003-2006 cross-sectional & panel data Implications of the relationship between size and scale economies of cooperative banks in Japan Translog cost-function methodology and intermediation approach Significant diseconomies of scale for small & large coop banks; Larger coop banks at cost disadvantage to smaller ones throughout most of 2003-6; also need stronger risk management programs 2009 Fulton and Hueth U.S. and Canadian agricultural cooperatives Convenience sample; 22 previous case studies of co-ops that restructured in 21 st century Were the conversions and restructurings that occurred during the early 21
st century isolated events or an on-going trend? Any applicable lessons for other cooperatives? Case studies using prior research Structural problems of cooperatives (lack of capital, property right, and portfolio problems) do impact structure chosen by cooperatives & their members; Natural pursuit of growth in scale, scope can lead to downfall – focuses on earnings and not patron value Restructurings & conversions to IOF (investor- owned firms) to raise capital, reduce member production & price risk, and increase member access to equity) Yüklə 273,55 Kb. Dostları ilə paylaş:
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