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Cooperative pricing and scale efficiency: The case of Korean rice processing complexes Public Deposited

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https://ir.library.oregonstate.edu/concern/articles/6395w777k

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  • Unlike most investor-owned enterprises, cooperatives often have freedom to choose among a variety of firm objectives. Using 2002–2008 plantand province-level data, we ask in the present article which of several alternative maximands a Korean cooperative rice processing firm pursues. In contrast to earlier studies, farmer-member supply functions are incorporated into the cooperative’s optimization framework. We show that only large cooperative firms have operated at efficient scale, while small and medium-sized ones have been scale-inefficient. Because the latter operate where scale returns are increasing, mergers of small and medium-sized cooperatives likely would be cost-reducing and member-return-enhancing.
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  • Yoo, C., Buccola, S., & Gopinath, M. (2013). Cooperative pricing and scale efficiency: The case of korean rice processing complexes. Agricultural Economics, 44(3), 309-321. doi:10.1111/agec.12013
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