Efficiency Analysis of Agricultural Cooperatives Using a Directional Distance Function
2017
Cho, H., Seoul National University, Seoul, Republic of Korea | Roh, J.S., Seoul National University, Seoul, Republic of Korea | Choi, H.W., Nonghyup, Seoul, Republic of Korea
This study is to implement an efficiency analysis for agricultural cooperatives in terms of financial statement by considering rural and urban type of agricultural cooperatives separately. The DEA method for the efficiency analysis based on a directional distance function is used, and the directional vectors are designed to be selected endogenously within the model. As the input variables, labor cost, operational cost, extension services cost, and invested capital are used, and the performances of marketing services and banking services are involved as the output variables. The result shows that the average inefficiency of urban type is more than the one of rural type. It is attributed from which the degree of inefficiency from the marketing services of urban type cooperatives is greater than the one of rural type cooperatives. This implies that the enlargement of marketing services should be required in both types of cooperatives, especially the urban type cooperatives need to expand the marketing services more than the rural type cooperatives. As for the input aspect, the inefficient use of extension services cost deserve attention, because the inefficiency of the extension services is not only higher compared to that of the other input variables, but also dispersed by cooperatives. Thus, the study suggests that an appropriate measure for the use of extension services cost should be considered for the improvement of efficiency.
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