The effect of organizational form and vertical integration on efficiency: An empirical comparison between cooperatives and investor owned firms

Abstract

This study compares the efficiency of firms with different organizational form, cooperatives and investor owned firms (IOFs). This comparison was effected taking into account differences in property rights and transaction costs. The comparative analysis of productive efficiency was performed in terms of total factor productivity using a sample of Spanish firms. The calculation was made by means of data panel methodology over a period of five years. The results obtained showed that cooperatives are more efficient than IOFs. However, there are no statistically significant differences between the form of governance of transactions within the collective of IOFs firms. Additionally, the results also indicated that the most efficient firms are those with the greatest degree of differentiation in their products. The article also provides us with theoretical and empirical guidelines, in order to make an accurate comparison of these aspects. Key words: Organizational form, transaction costs, property rights, efficiency.