Comparative efficiency of agricultural cooperatives and conventional firms in a sample of quasi-twin companies

TitleComparative efficiency of agricultural cooperatives and conventional firms in a sample of quasi-twin companies
Publication TypeJournal Article
Year of Publication2018
AuthorsBrandano, MG, Detotto, C, Vannini, M
JournalAnnals of Public and Cooperative Economics
VolumeFirstonline
Pagination1-24
Abstract

The resilience of cooperatives and their positive contribution to employment in times of crisis is well established. However, their overall economic performance relative to conventional firms is still controversial, casting doubt on the ability of this alternative organizational form to govern the fundamental drivers of productivity. To shed new light on the issue, we study the comparative technical efficiency of agricultural cooperatives (ACs) and conventional firms (CFs), drawing on a unique data set comprising all wine‐producing companies in Sardinia (Italy) from 2004 to 2009. Due to the similarity of the habitats in which the firms operate and the careful measurement of several key inputs, the observed units are ‘twins’ in all non‐organizational respects, providing an ideal setting for comparison. Having generated efficiency scores through Data Envelopment Analysis (DEA), we regressed the scores on external covariates and ownership type using a pooled truncated maximum likelihood formulation. Our findings, which survive correction for spatial correlations, indicate that cooperatives are less technically efficient than their capitalist counterparts and struggle more to adapt to extreme weather fluctuations. Both results are particularly worrying in light of the main challenges facing the wine industry in the near future: liberalization of EU planting rights and climate change.

URLhttps://onlinelibrary.wiley.com/doi/full/10.1111/apce.12220
DOI10.1111/apce.12220
KeywordsCapitalist firms, Cooperatives, dea, efficiency, Post DEA