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What deters labor-owned firm creation? Evidence from Italian manufacturing sectors

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  • Belloc, Filippo

Abstract

We analyze the determinants of labor-owned versus capital-owned firm creation. We match firm-level information on a large sample of new manufacturing firms with available industry-level proxies of the main determinants of ownership structures according to existing economic theories. We estimate a logit model and quantify the empirical contribution of each argument to explain labor-owned versus capital-owned firm entry. Our results show that human capital specificity and workers heterogeneity largely explain labor-owned firm entry, while other dimensions, such as limited worker wealth, have a weaker statistical relevance. These findings are robust to different estimation methods and are unlikely to be affected by endogeneity concerns. Our results contribute to the general understanding of the endogenous dynamics of ownership rights distribution in manufacturing firms and to the elaboration of policy initiatives aimed at supporting cooperative modes of firm organization.

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  • Belloc, Filippo, 2017. "What deters labor-owned firm creation? Evidence from Italian manufacturing sectors," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 139-153.
    • Handle: RePEc:eee:jcecon:v:45:y:2017:i:1:p:139-153
    DOI: 10.1016/j.jce.2016.12.001
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    Cited by:

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    3. Damion Jonathan Bunders & Agnes Akkerman, 2023. "Commitment issues? Analysing the effect of preference deviation and social embeddedness on member commitment to worker cooperatives in the gig economy," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(4), pages 1007-1026, November.
    4. Marina Albanese & Cecilia Navarra & Ermanno Tortia, 2019. "Equilibrium unemployment as a worker insurance device: wage setting in worker owned enterprises," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(3), pages 653-671, October.

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    More about this item

    Keywords

    Labor-owned firms; Theory of the firm; Asset specificity; Firm entry;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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