R.A.M.E. (Rafat) Soboh, MSc: “Econometric Analysis of the Performance of Cooperatives and IOFs in the European Dairy Industry”

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14 Dec 2009 16:00
Unit: Wageningen University
Location: Aula, building 362, Gen. Foulkesweg 1, Wageningen
Organisation: Wageningen University
Promotor: prof.dr.ir. A.G.J.M. Oude Lansink (Businesseconomics)
Promotor: Prof.dr.ir. G. van Dijk

 The performance of cooperatives and investor owned firms (IOFs) in the European dairy processing industry is measured in way to account for differences in their mission and objectives. Cooperatives are transaction oriented, the members provide themselves with services they could not secure otherwise. In addition member are owners and determine the mission and strategy of cooperatives as the owners of the cooperative enterprise in an equal manner. We investigated the consequences of members’ role on the (technical and economical) efficiencies of the cooperatives. The failure of the empirical studies to apply the models proposed by the theoretical literature was a reason to conduct the empirical analysis of this study. The results shows that cooperatives are less profitable but operationally more efficient, they have higher material costs and lower debts than IOFs. Furthermore, cooperatives display a substantially greater variation in financial indicators than IOFs. Cooperatives are found to have a more productive technology than IOFs, but they use their production potential less efficiently. Additionally accounting explicitly for the objectives of cooperatives generates different outcomes compared with treating cooperatives as if they were IOFs. Measuring the performance of cooperatives as IOFs produces misleading insights about the cooperatives’ performance.
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