We investigate the comparative technical efficiency of producer cooperatives (PCs) and conventional firms (CFs) by looking at the performance of a mixed sample of Sardinian wine producing companies over the period 2004-2009. Thanks to the similarity of the habitats in which the firms operate, the peculiarities of the production environment, and the careful measurement of some key inputs through suitable aggregation of accounting data, the observed units are “twins” in all nonorganizational respects, providing one natural setting for comparative work. The analysis is carried out in two steps: in the first, technical efficiency indicators for each firm in each year are calculated using DEA with reference to a common production frontier. Subsequently, the measured efficiency scores become the dependent variables of a pooled truncated maximum likelihood regression in which we control for both internal and external effects and firm type. Moreover, a double bootstrap procedure is run to compute the standard errors and confidence intervals of the coefficients estimates. According to our findings cooperatives are less technically efficient than their capitalist counterparts. A result which is particularly worrying in light of the forthcoming liberalization of the EU wine sector and the unique economic and social role played by cooperatives in the rural world.
Comparative efficiency of producer cooperatives and conventional firms in a sample of quasi-twin companies
BRANDANO, MARIA GIOVANNA;DETOTTO, CLAUDIO;
2012-01-01
Abstract
We investigate the comparative technical efficiency of producer cooperatives (PCs) and conventional firms (CFs) by looking at the performance of a mixed sample of Sardinian wine producing companies over the period 2004-2009. Thanks to the similarity of the habitats in which the firms operate, the peculiarities of the production environment, and the careful measurement of some key inputs through suitable aggregation of accounting data, the observed units are “twins” in all nonorganizational respects, providing one natural setting for comparative work. The analysis is carried out in two steps: in the first, technical efficiency indicators for each firm in each year are calculated using DEA with reference to a common production frontier. Subsequently, the measured efficiency scores become the dependent variables of a pooled truncated maximum likelihood regression in which we control for both internal and external effects and firm type. Moreover, a double bootstrap procedure is run to compute the standard errors and confidence intervals of the coefficients estimates. According to our findings cooperatives are less technically efficient than their capitalist counterparts. A result which is particularly worrying in light of the forthcoming liberalization of the EU wine sector and the unique economic and social role played by cooperatives in the rural world.
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