Agricultural cooperatives have the main goals of meeting the economic, social and cultural needs of their members. Although they do not seek profits, they must be competitive since they compete with other cooperatives and companies in the market. In this sense, the search for technical efficiency to give cooperatives a better market position contrasts with the difficulty these organizations face in obtaining foreign capital to enable greater investments. There is little empirical evidence, however, of the relationship between financial constraints and technical efficiency in these organizations. According to theoretical assumptions, this relationship could be positive or negative. Thus, this paper analyzes the impact of financial constraints on the technical efficiency of Brazilian agricultural cooperatives. For this, we used two metrics to measure financial constraint and analyzed panel data on 68 Brazilian agricultural cooperatives for the 2005-2014 period. Despite the theoretical predictions, our main results suggest there is no evidence that financial constraints affect technical efficiency. This result can be explained by the characteristics attributed to Brazilian cooperatives, that is, the fact they deal with different commodities (multi-purpose) and do not have strong demand for investments (technology). This paper contributes to the literature both by providing new empirical evidence regarding the relationship between technical efficiency and financial constraints and by introducing a new metric for analyzing financial constraint in the context of cooperatives.
Financial Constraints on Innovative SMEs: Empirical Evidence from the Visegrad Countries