Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison

Abstract

The authors analyze the differences between the behavior of private firms and that of producer cooperatives in a matched sample of the two organizational types from the regions of Emilia Romagna and Toscana in North-Central Italy, where producer cooperatives are numerous. Individual firm-level surveys provide new detailed comparative data on key issues such as investment, productivity, wages, employment, and industrial relations. Differences between the two types of firm are found in labor relations, employment, pay, production methods, the relationship to the external market environment, and the level of economic performance. The authors find no significant differences in investment horizons or criteria for finance, despite theoretical assertions to the contrary. The cooperatives apparently have higher productivity, more labor-intensive production methods, lower income differentials, and a more tranquil industrial relations environment than the private firms.

Leximin

“…The principles governing these worker cooperatives are similar to those of the International Cooperative Alliance, of which La Lega is a section, and Mondragon. A study of this sector concludes that it is characterized by higher productivity and better labor relations than comparable Italian conventional enterprises, consistently with other empirical work (Bartlett et al 1992). The rules of La Lega permit secession from the network, but such secession is uncommon.…”

Banking Market Structure, Creation and Activity of Firms: Early Evidence for Cooperatives in the Italian Case

“…Without going into details, positions range from some claiming an intrinsic inferiority of cooperatives, which manifests itself in all the phases of their life-cycle (Ward, 1958;Williamson, 1980;Porter and Scully, 1987;Hart and Moore, 1996), to others treating cooperative firms on equal terms respect to the other enterprises (Staber, 1989;Bartlett et al, 1992;Bonin et al, 1993;Stiglitz, 2004). The general picture emerging from this study is that, with regard to the phase of creation of their life cycle, cooperatives are not different from other firms, at least for how they tend to be perceived by banking institutions and to respond to bank market power.…”

The Firm As a Common. The Case of the Accumulation and Use of Capital Resources in Co-operative Enterprises

“…Even if the empirical evidence is not completely univocal, the phenomenon of undercapitalization due to suboptimal reinvestment of net residuals into locked assets and to the limited access to financial markets due to the absence of tradable equity has been taken as fundamental explanation of self-selection of co-operatives into low capital intensive sectors and of the reduced rate of creation of new co-operative ventures (Bartlett et al, 1992;Bonin, Jones and Putterman, 1993;Podivinsky and Stewart, 2006;Burdin, 2015). However, the ability of at least some forms of co-operative enterprises in some specific sectors, for example producer, (iii) the balance between individualized and common ownership, all appear to be key elements of sustainable capital accumulation, the overcoming of undercapitalization; and the prevention of demutualization (Henrÿ, 2012).…”