Justine Valette
University of Montpellier
I am a Ph. D. student in corporate finance. I work on the survival capacity of cooperatives. I wonder if they have better survival rates than corporations and try to determine why.
Topic 19; STAGE 4; Meso. Special session: Wine Cooperatives in Europe at the Cross-Roads: Strategies, Resilience, and Metamorphosis This paper examines the ability of cooperatives to survive after crisis, during a turbulent... [ view full abstract ]
Topic 19; STAGE 4; Meso.
Special session: Wine Cooperatives in Europe at the Cross-Roads: Strategies, Resilience, and Metamorphosis
This paper examines the ability of cooperatives to survive after crisis, during a turbulent environment. We focus on the French wine companies. The French industry knew a lot of shifts and mutations from decades, forcing companies to evolve and undergo irreversible transformations for achieving a better fit to their environment. We suppose - following the well-known adage - that is not the fittest, but the most adaptable who will survive. Thus, while most studies on the topic try to highlight relevant strategies to create value and perform in these changing conditions, we reexamine the adaptability of French wineries to their environment through an original approach: survival analysis.
Traditional theories suggest that cooperatives are inefficient and consequently are prone to failure, but recent literature suggest they could be more resilient and are actually a modern form of organization, able to balance economic constraints and new societal expectations (Núñez-Nickel and Moyano-Fuentes, 2004; Iliopoulos, 2015). Can cooperatives cope better? We found that cooperatives survive longer than corporations. This result is robust to semi-parametric and parametric models, even when we control for different causes of demise.
These last decades, the long term success and survival of a firm in the wine industry have been described in the literature as depending mainly on a firm’s ability to become market oriented, and to engage export and intangibles efforts (Simon-Elorz et al., 2015). However, cooperatives are often less engaged in intangible investments and export effort than corporations, because of their member-orientation (Hanf and Schweickert, 2014). We found that the main determinants of survival are different for cooperatives and corporations. So, why cooperative cope better? We suggest that cooperatives are able to absorb a part of the impact of the wine crisis at the expense of their members, explaining their better survival rate.
Hanf, J. and Schweickert, E. (2014) Cooperatives in the balance between retail and member interests: the challenges of the German cooperative sector. Journal of Wine Research 25(1): 32–44.
Iliopoulos, C. (2015) Ownership and Governance in Agricultural Cooperatives: An Update. Athens, Greece: AGRERI.
Núñez-Nickel, M. and Moyano-Fuentes, J. (2004) Ownership Structure of Cooperatives as an Environmental Buffer. Journal of Management Studies 41(7): 1131–1152.
Simon-Elorz, K., Castillo-Valero, J. and Garcia-Cortijo, M. (2015) Economic Performance and the Crisis, Strategies Adopted by the Wineries of Castilla-La Mancha. Agribusiness 31(1), 107–131.
