Dijk, G., van

Giesen, G.W.J.

Oude Lansink, A.G.J.M.

Soboh, R.A.M.E.

English

Wageningen Yield 

COMPARISON OF THE PERFORMANCE OF DAIRY 
COOPERATIVES AND INVESTOR OWNED FIRMS IN DIFFERENT 
EU COUNTRIES 
Rafat Ali Musa Ewaida Soboh 
Alfons Oude Lansink* 
Gert van Dijk 
Gerard Giese* 
Dairy cooperatives were established for different objectives than Investor 
Owned Firms (IOF), however, both types of firm function in the same market 
environment. Cooperatives are,to provide farmers who supply the milk, as the 
owners and the users of the cooperative, with more power to secure current and 
future returns. The IOF's were established to seek a high profitability for the 
investor-owners. Given the differences in objectives of cooperatives and IOF's, 
differences in their performance may be expected. The dairy market in some 
European countries is largely dependent on the performance of cooperatives and 
IOF's( for instance: The Netherlands and Denmark). 
In this paper our objective is twofold. First, we compare the cost efficiency 
(decomposed into technical and allocative efficiency) of dairy cooperatives with that 
of the investment oriented firms in several European countries. Second, we develop a 
test for differences in allocative and technical efficiency between cooperatives and 
IOF's. Our methodology is Stochastic Frontier Analysis (SFA). The data are 
obtained from a European data-base, as an unbalanced panel (1996-2004) for a 
sample of 40 dairy plants, consisting of 18 cooperatives and 22 IOF's, from Belgium, 
Denmark, France, Germany and The Netherlands. In addition to the comparison 
between the cooperatives and investment oriented firms, the results provide 
comparison of the performance of dairy cooperatives in different countries 
* Wageningen University, The Netherlands, URL:bec.wur.nl/UK7 
Center for Entrepreneurship (NCE), Netherlands Institute for Cooperative Entrepreneurship (NICE), 
Nyenrode University, The Netherlands 


Comparison of the performance of dairy cooperatives and investor owned firms in different EU countries

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