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Business Ownership by Workers: Are Worker Cooperatives a Viable Option?

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  • Artz, Georgeanne M.
  • Kim, Younjun
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    Abstract

    One possible strategy for both succession and new business development is employee ownership.� New business formation as an employee-owned firm or cooperative may have some advantages over formation as a sole proprietorship or partnership: pooling financial resources, spreading risk and combining the various knowledge and skills of the members involved. In the case of business succession, selling to employees provides a tax benefit to the owners and increases the probability that the business will continue to exist in its current location, benefitting both the employees themselves and the local community. While worker cooperatives (or employee-owned cooperatives) are currently rare in the United States, successful examples exist, suggesting potential for future development of this type of organization. This paper reviews the literature on worker cooperatives and presents data on the extent and nature of worker cooperatives in the United States. It concludes with a discussion of the implications for employee-owned cooperative development in Iowa and provides suggestions for future research and outreach programming on this topic.

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    Bibliographic Info

    Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 34575.

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    Date of creation: 09 Nov 2011
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    Handle: RePEc:isu:genres:34575

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    Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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    Web page: http://www.econ.iastate.edu
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    1. Derek C. Jones & Panu Kalmi & Antti Kauhanen, 2010. "Teams, Incentive Pay, and Productive Efficiency: Evidence From A Food-Processing Plant," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(4), pages 606-626, July.
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    21. Chris Doucouliagos, 1995. "Worker participation and productivity in labor-managed and participatory capitalist firms: A meta-analysis," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(1), pages 58-77, October.
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    Cited by:
    1. Jessica Gordon Nembhard, 2014. "Community-Based Asset Building and Community Wealth," The Review of Black Political Economy, Springer, vol. 41(2), pages 101-117, June.

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