Book Chapter
Network Externalities and Cooperative Networks

Stylized Facts and Theory

This chapter argues that cooperatives may benefit from being in a region with other cooperatives, or in a sector which there are many cooperatives, or within a supply chain (that is, having significant forward or backward linkages) in which cooperatives are common. In other words there are network externalities or complementarities of organizational type, at least when it comes to organizational form. As a result organized networks can serve to internalize some key externalities that might pose significant problems for individual cooperatives operating in isolation.