Efficiency of European Dairy Processing Firms

R.A.M.E. Soboh, A.G.J.M. Oude Lansink, G. van Dijk

Research output: Contribution to journalArticleAcademicpeer-review

18 Citations (Scopus)


This paper compares the technical efficiency and production frontier of dairy processing cooperativesand investor owned firms in six major dairy producing European countries. Two parametric produc-tion frontiers are estimated, i.e. for cooperatives and investor owned firms separately, which are usedto evaluate the intra- and inter-type technical efficiency of each firm. The models are estimated usingaccountancy data from the AMADEUS data base over the years 1995-2005. Results show that dairy coop-eratives have a more productive technology, but are slightly less efficient than investor owned firmsduring this period. Differences in production technology and technical efficiency of the cooperativesacross countries reflect differences in local market conditions and characteristics of the companies. Bothcooperatives and investor owned firms are characterized by decreasing returns to scale. However, returnsto scale are on average much smaller for cooperatives, implying that the scale of operation of cooperativesis too large.© 2014
Original languageEnglish
Pages (from-to)53-59
JournalNJAS Wageningen Journal of Life Sciences
Publication statusPublished - 2014


  • productive efficiency
  • cooperatives


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