Journal of Comparative Economics 30, 296–316 (2002) doi:10.1006/jcec.2002.1773 Organizational Type and Efficiency in the Costa Rican Coffee Processing Sector 1 Roberto Mosheim University of Puerto Rico, Mayag¨ uez Campus, Mayag ¨ uez, Puerto Rico 00680 Received April 25, 2001; revised March 1, 2002 Mosheim, Roberto—Organizational Type and Efficiency in the Costa Rican Coffee Processing Sector Data envelopment analysis techniques are used to calculate and decompose cost efficiency for the Costa Rican coffee processing sector. An unbalanced panel of 16 investor-owned firms and 28 cooperative firms covering the period from 1988–1989 to 1992–1993 is con- structed. Seemingly unrelated regression models are used to analyze the impact on efficiency of organizational type, location, firm size, farm size, competition, time, and a bumper crop dummy. Findings show that organizational type matters in explaining the performance of the sector. Cooperatives are found to be no less cost and allocatively efficient than investor- owned firms but the former are less scale efficient than the latter. J. Comp. Econ., June 2002, 30(2), pp. 296–316. University of Puerto Rico, Mayag¨ uez Campus, Mayag ¨ uez, Puerto Rico 00680. C  2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved. Journal of Economic Literature Classification Numbers: L23, D23, P13. 1. INTRODUCTION In evaluating the role of cooperatives in market economies, productive efficiency and its determinants are important concerns. This study uses linear programming models to construct a best practice frontier as a benchmark for a group of coopera- tive (CPCs) and investor-owned firms (IOFs) in the Costa Rican coffee processing 1 Special thanks to the personnel of the Department of Agricultural and Economic Studies at the Costa Rican Coffee Institute for providing the data used in this study. I also thank the officials at FEDECOOP, R.L., COOCAFE, R.L., and INFOCOOP, R.L., and various individual cooperatives for facilitating valuable information. The Facultad Latinoamericana de Ciencias Sociales in Costa Rica (FLACSO- Costa Rica) provided partial financial support for this research. I acknowledge John Bonin, Knox Lovell, George Batesse, Gary Ferrier, Tim Coelli, Carl Pasurka, Evelyne Huber, and two anonymous referees for their detailed and helpful comments. Laura Moore provided excellent editorial help. Maria Eugenia Castro provided valuable help in data collection efforts. All remaining mistakes are my responsibility. 296 0147-5967/02 $35.00 C  2002 Association for Comparative Economic Studies Published by Elsevier Science (USA) All rights reserved.