The performance of agricultural cooperatives depends on their business objectives, which are defined in different ways in the literature. We review the theoretical literature on the performance of agricultural marketing cooperatives. Studies can be divided into two classes, those that assume a single objective and those that assume multiple objectives. This classification integrates three views of the cooperatives: ( a) vertical integration of firms, ( b) independent enterprise, and ( c) coalition of firms. Empirical studies on the financial performance of cooperatives are classified into two categories, studies based on the economic theory of the firm and studies that emphasize accounting techniques. Empirical studies have failed to address the cooperatives’ objectives as represented by the theoretical literature on cooperative performance.

Performance Measurement of the Agricultural Marketing Cooperatives: The Gap between Theory and Practice

Building on recent advances in cooperative literature and practice, we conceive two key organizational features of cooperatives: cooperative structure (in terms of control, ownership, and cost/pricing policies resulting in traditional and re-engineered co-ops) as well as entrepreneurial cooperative firm culture. Then we conceptualize and test the effect of these organizational features on the market orientation and performance of the cooperative firm relying on a sample of Dutch co-ops. We cannot establish a systematic influence of the cooperative structure; however, a significant influence of individualized member ownership on performance and of cost/pricing policies on market orientation has been found. Entrepreneurial firm culture has a significant effect on both market orientation and performance. [EconLit citations: L200, M310, Q130.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 379-396, 2004.

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The impact of cooperative structure and firm culture on market orientation and performance

Measurement and sources of overall and input inefficiencies: Evidences and implications in hospital services

A debate has arisen concerning the economic efficiency of cooperatives relative to other organizational forms. This paper discusses the efficiency concepts and economic theory relevant to the debate and then proceeds to study the empirical evidence. No credible evidence exists to support the proposition that cooperatives are inefficient relative to investor-owned businesses.

What Do We Know About the Economic Efficiency of Cooperatives: An Evaluative Survey

This paper describes the neo-institutional approaches of transaction cost economics, agency theory, and property rights analysis and summarizes efforts by economists to apply these concepts to cooperatives. Several problems intrinsic to the cooperative organizational form and its property rights structure are reviewed. These problems have been hypothesized to affect the comparative economic efficiency of cooperative firms and have led to the development of life cycle models seeking to explain the formation, growth, and eventual decline of cooperatives as markets evolve. In this context, statistical analyses of the comparative efficiency of cooperatives and ex post studies of cooperative conversions are surveyed.

Cooperative Organizational Strategies: A Neo-Institutional Digest

The comparative financial performance of cooperatives and investor-owned firms (IOFs) in the fruit and vegetable processing and the dairy industries was analyzed for the years 1976 through 1987. Contrary to theoretical expectations, the cooperatives in both industries were found to perform as well as or better than the comparable IOFs by profitability, leverage, and interest coverage measures. No clear evidence was found of the hypothesized overinvestment in fixed assets or pronounced moral hazard behavior in cooperatives. The lack of significant differences in profitability between the two types of firms suggests that cooperatives may be following goals similar to IOFs.

Comparative performance of cooperatives and investor-owned firms in US food industries

Size and industry effects in the performance of agricultural cooperatives

A comparison of regional dairy cooperatives with investor-owned dairy firms from the period 1976-87 produced empirical findings that are at variance with the hypotheses suggested by the theory of cooperatives The cooperatives in the sample performed significantly better than the IOFs when compared by leverage, liquidity, asset turnover, and coverage ratios, while the rate of return to equity was not found to be significantly different Techniques are also proposed for valuing the nonmarket aspects of cooperatives that are not captured by financial ratio analysis

Performance of Cooperatives and Investor-Owned Firms in the Dairy Industry

This article explores the issue of cooperative growth from both an empirical and theoretical perspective. Using total assets as the measure of cooperative size, we present long-term, time-series data from seven of the largest regional agricultural cooperatives in Canada and the United States. We then examine the issue of growth from a theoretical perspective, integrating the literature on investor-oriented firm growth with the literature on cooperative growth. The empirical analysis that follows from the theoretical analysis suggests it is not possible to reject Gibrat's Law for six of the seven cooperatives; that is, that a cooperative's long-term growth rate is independent of its size. The empirical results also suggest the growth rate for the cooperatives in the sample is low, perhaps even zero. © 1995 by John Wiley & Sons, Inc.

Cooperative growth: Is it constrained?

Sources and uses of funds in agricultural cooperatives are examined and compared to the aggregate of nonfinancial corporations for the period 1973-1987. Cooperatives are observed to finance nearly half their growth with equity. The equity financing proportion of cooperatives is statistically indistinguishable from the national average of nonfinancial corporations in the years 1973-1983 and is consistently higher than the national average since 1984. This finding contradicts the hypothesis of equity shortage in cooperatives.

Claudia Parliament

Papers

Comparative performance of cooperatives and investor-owned firms in US food industries

Size and industry effects in the performance of agricultural cooperatives

Performance of Cooperatives and Investor-Owned Firms in the Dairy Industry

Cooperative growth: Is it constrained?

Financing Of Growth In Agricultural Cooperatives