Asset specificity and the emergence of New Generation Cooperatives – The case of a Danish potato starch cooperative

In this paper we analyze the factors that determine the emergence of new generation cooperatives using the formation and structure of the Danish potato starch cooperative KMC as a historical example. The transaction cost framework has been used in order to analyze how actors chose among different types of governance structures. Theoretical framework and interviews have been combined in exploring and investigating the transactions in different settings. We show in our analysis that the governance structure choice depends heavily on the level and orientation of asset specificity as well as on the downstream market structure. Different problems that occur as a result of transaction costs related to the asset specificity are compared in different settings. Furthermore we claim that the orientation of the asset specificity and the contract-based downstream market have resulted on the emergence of the new generation cooperative.

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 Record created 2017-04-01, last modified 2018-01-22

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