Organizational Models for Agricultural Cooperatives: Empirical Evidence for their Performance

Abstract

The purpose of this paper is to compare the performance level between the traditional agricultural cooperatives and the cooperatives with capital-seeking entities in the Greek food sector. Previous researches suggest that the performance of the cooperatives is determined by their organizational design. Thus, this fact imposes the need to examine if the organizational models applied by the agricultural cooperatives affect their profitability outcome. This is the first Greek survey on performance contrasting traditional agricultural cooperatives and cooperatives with capital-seeking entities. Financial data of 34 cooperative organizations were used in a profitability equation, estimated with generalized error-structure model for a 5-years period. The findings show that there are differences in the economic results and the factors affecting profitability between these two types of cooperatives, providing evidence that the organizational type affects performance. The results also indicate that there exists management inefficiency especially for the traditional cooperatives. Based on the particular findings, cooperative practitioners and policymakers could advance their knowledge in order to boost performance level in cooperatives.