Abstract

In the Chinese mainland, government subsidies look like a delicious “pie” hunted by different cooperatives. In
order to get more charge of it, however, some cooperatives used strategies distorting the cooperative’s basic
characters. These problems appeared also decline the capital usage efficiency of government subsidies in a
certain extent. This paper uses transaction cost theory to explore the current situation and the cost/benefit existed
in different cases. The authors believe that the win-win options for Chinese cooperatives are getting the
supportive resource, developing themselves and profiting from the market as well. In the end, authors suggest
that the financial subsidies should be more used on building a public service platform to realize more and more
cooperatives benefiting.

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