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

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  • Zvi Lerman

    (Department of Agricultural Economics and Management, Hebrew University, Rehovot, Israel)

  • Claudia Parliament

    (Department of Agricultural and Applied Economics, University of Minnesota, St. Paul, MN)

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    Abstract

    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.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

    Volume (Year): 6 (1990)
    Issue (Month): 6 ()
    Pages: 527-540

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    Handle: RePEc:wly:agribz:v:6:y:1990:i:6:p:527-540

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    Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Kwo-Shin Chen & Emerson M. Babb & Lee F. Schrader, 1985. "Growth of large cooperative and proprietary firms in the US food sector," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 1(2), pages 201-210.
    2. Staatz, John M., 1989. "Farmer Cooperative Theory: Recent Developments," Research Reports, United States Department of Agriculture, Rural Development Business and Cooperative Programs 52017, United States Department of Agriculture, Rural Development Business and Cooperative Programs.
    3. Sexton, Richard J. & Wilson, Brooks M. & Wann, Joyce J., 1989. "Some Tests Of The Economic Theory Of Cooperatives: Methodology And Application To Cotton Ginning," Western Journal of Agricultural Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 14(01), July.
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    Cited by:
    1. Chaddad, Fabio Ribas, 2006. "Investment Constraints in Agricultural Cooperatives: Theory, Evidence and Solutions," 44th Congress, July 23-27, 2006, Fortaleza, Ceará, Brazil, Sociedade Brasileira de Economia, Administracao e Sociologia Rural (SOBER) 143259, Sociedade Brasileira de Economia, Administracao e Sociologia Rural (SOBER).
    2. McKee, Gregory & Shaik, Saleem & Boland, Michael, 2009. "Role of Financial Variables in Explaining the Profitability of North Dakota Farm Supply and Grain Marketing Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, Hebrew University, Center for Agricultural Economic Research, vol. 37(2).
    3. Declerck, Francis & Viviani, Jean-Laurent, 2012. ""Solvency and Performance of French Wineries in Times of Declining Sales: Co-operatives and Corporations”," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, International Center for Management, Communication, and Research, vol. 3(2).
    4. Marco Fazzini & Antonella Russo, 2014. "Profitability in the Italian Wine Sector: An Empirical Analysis of Cooperatives and Investor-Owned Firms," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(3), pages 130-137, July.
    5. Katchova, Ani L. & Enlow, Sierra J., 2013. "Financial Performance of Publicly-Traded Agribusinesses," Staff Papers, University of Kentucky, Department of Agricultural Economics 164518, University of Kentucky, Department of Agricultural Economics.
    6. Kyriakos Kyriakopoulos & Matthew Meulenberg & Jerker Nilsson, 2004. "The impact of cooperative structure and firm culture on market orientation and performance," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 20(4), pages 379-396.
    7. Lerman, Zvi & Parliament, Claudia, 1991. "Size and industry effects in the performance of agricultural cooperatives," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 6(1), October.

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