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Efficiency of Cooperatives and Investor Owned Firms Revisited

Authors

  • Rafat Soboh,

  • Alfons Oude Lansink,

  • Gert Van Dijk

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    • Rafat Soboh is a senior consultant at TERMAC Consultancy & Research. E-mail: rafat.soboh@termac.nl for correspondence. Alfons Oude Lansink is a professor of Business Economics at Wageningen University. Gert van Dijk holds the NCR-chair Theory and Practice of Cooperation in the Dept of Marketing and Consumer Behaviour at Wageningen University. Thanks are due to two anonymous reviewers and the editor for comments on an earlier draft.


Abstract

The objectives of dairy processing cooperatives differ from those of investor-owned firms (IOFs). However, the literature usually assumes the same performance measures for cooperatives vis-a-vis IOFs. This study compares the performance of dairy cooperatives and IOFs in major European dairy producing countries. A traditional input oriented approach is used and two alternative approaches are used to account for the differential objectives of cooperatives. Cooperatives’ performance differs across the two approaches from being outperformed by IOFs using the input oriented approach to outperforming them when using an approach that is more in line with cooperatives’ objectives.

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