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Appears in Collections:Accounting and Finance Working Papers
Title: Firms, Nonprofits, and Cooperatives: A Theory of Organizational Choice
Author(s): Herbst, Patrick
Prufer, Jens
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Citation: Herbst P & Prufer J (2011) Firms, Nonprofits, and Cooperatives: A Theory of Organizational Choice. SSRN Working Paper Series. Social Science Research Network.
Keywords: Theory of the Firm
Organizational Choice
Organizational Change
JEL Code(s): L21
Issue Date: 20-Sep-2011
Publisher: Social Science Research Network
Series/Report no.: SSRN Working Paper Series
Abstract: We formalize the difference between firms, nonprofits, and cooperatives and identify optimal organizational choice in a model of quality provision. Firms provide lowest and nonprofits highest levels of quality. Efficiency, however, depends on the competitive environment, the decision making process among owners and technology. Firms are optimal when decision making costs are high. Else, firms are increasingly dominated by either nonprofits or cooperatives (depending on the incremental costs of quality production). Increased competition improves relative efficiency of firms and decreases relative efficiency of nonprofits.
Type: Working or Discussion Paper
Rights: Author retains copyright.
Affiliation: Accounting and Finance
Tilburg University

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