Abstract

Firms selling products overseas may do so in a wide variety of ways, such as through trading companies, foreign distributors, brokers, direct sales, license arrangements, and foreign direct investment. Many firms employ a portfolio of arrangements for each of their products. Using a share equation model, we examine the factors influencing food processing cooperatives' foreign business arrangements. Particularly important are the cooperative's financial resources and structure, risk exposure and risk preferences, information resources, and product types. Compared to investorowned firms, we find that cooperatives have distinct disadvantages in investing or selling directly abroad, although the disadvantages are tempered by some equalizing considerations.

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