Producer Co‐Operatives

Abstract

In producer co‐operatives (PCs), decision‐making and ownership lie with the firm's workforce. Typically, the PC sector is of marginal economic significance – interest in PCs stems primarily from features such as democratic governance. Comparing PCs with capitalist firms (CFs) we find that PCs are larger, are not confined to particular industries, have a pronounced productivity edge, and have survival rates at least as good. Entry is a key problem for PCs, and formations respond pro‐cyclically to unemployment while there are important network effects. No persuasive evidence exists for the alleged tendency of PCs to degenerate or for underinvestment. While CFs adjust employment in response to product price changes and demand shocks, in response to similar perturbations PCs adjust pay more than employment. Within‐firm inequality is lower in PCs, though this may lead to loss of talent. Evidence on worker outcomes such as job satisfaction sometimes suggests poorer outcomes for workers in PCs. Significantly larger PC sectors are unlikely to result from policies promoting “recovered” companies. To better understand many issues, improved and comparative data sets – for both sets of firms and individual enterprises, and with a broader range of crucial variables – are needed. Two underdeveloped theoretical issues are the role of co‐operative networks and the relationship between PCs and social capital.

Institutional Design and Cooperative Success: The Case of Producer Cooperatives

“…By building on previous work for SOs, including Birchall (2012a;2012b), Smith (e.g., 2001) and Desrochers and Fischer (2005) and studies that emphasize the importance of the actual institutional details of individual PCs (e.g., Estrin, Jones and Svejnar, 1987;Mirabel, 2021;Jones, 2022), I discuss two related issues concerning the institutional design of SOs and PCs. First, is there a preferred SO for PCs?…”

Guest editorial: Introduction to the special issue “diversity and employee participation”

“…The overall implications of Hansmann's hypothesis have not been borne out. Employee-owned and labor-managed firms are present in a range of industries with heterogenous workforces, yet their total factor productivity is found to be at least as high as that of conventional firms (Fakhfakh et al , 2012; Jones, 2022; Pérotin, 2012). Employee-owned firms and worker cooperatives also seem to survive longer than conventional firms (see, e.g.…”