Abstract: A comparison of regional dairy cooperatives with investor owned dairy firms for the period 1976-1987 produced empirical findings that are at variance with the hypotheses suggested by the theory of cooperatives. The cooperatives in the sample performed significantly better than the IOFs when compared by leverage, asset turnover, and coverage ratios, while the rate of return to equity was not found to be significantly different. Techniques are also proposed for valuing the nonmarket aspects of cooperatives that are not captured by financial ratio analysis.

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