The Model Comparison Of Rural Funding Cooperative Organizations Under Transaction Cost Perspective

The economic determines of cost make it play an essential role in economic management, while reducing the cost is also significant for the organization’s operational efficiency. Ronald Coase (1937) first proposed the concept of ’transaction cost’, then Williamson, Klein, Alchian and other scholars further develop the concept of this concept and it was shift from highly abstract analysis in the study to an operational concept. The development and innovation of cost economics theory provides a broad space for the study of modern accounting. Nowadays, more and more people use the Coase theorem and transaction cost theory do the exploratory research of some problems of accounting, some of them already made considerable research.Financial self-help groups in rural areas in China are outside the existing formal financial system, they are real arrangements and formal arrangements of cooperative financial system (He Guangwen,2009). There are two factors of this kind of financial system. The first one is the geographical, kinship and close contact with the edge of the industry. Next comes to the unique regional environment for the community to make an acquaintance which has less or even no cost on the information compared with the other traditional financial institutions in rural areas. These two elements can decrease or even eliminate the information asymmetry arising from adverse selection and moral hazard that make this financial system gain attention from the public.Literature review shows the mode of a large number of current cooperative financial organizations, in a certain degree, can be summed up as the mode of mutual funds which is based on the farmer cooperatives and the mode of financial cooperative organizations alone. According to transaction cost theory, the system belongs to different property rights arrangements has different performance, which means the different organizational mode has different effects of the costs and benefits of cooperation.This study summarized the experiences of practice and based on the transaction cost theory of new institutional economics. From the accounting point of view, it investigated the transaction costs of the financial cooperative organization which rooted in professional cooperative organization of farmers and the cooperative institutes that only have the function of financial cooperation. The purpose of this research is analysis the different effects on transaction costs of these two modes. The results illustrate that compared with simple rural financial cooperative organizations, the professional productive cooperative organizations have more merits on information searching costs and operating costs. The financial cooperative organization in professional production organization should be developed and paid more attention, and the financial cooperative organizations which have no professional background, more or less, should also be attention at the same time.