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Constitutional Design and Investment in Cooperatives and Investor‐Owned Enterprises

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  • Alberto Bacchiega
  • Gianni De Fraja

Abstract

This paper studies the role of the corporate governance system in cooperatives and in investor‐owned enterprises. We abstract from all possible differences between the two systems except the type of majority needed to take decisions: this is one‐head‐one‐vote for cooperatives and proportional to capital invested in investor‐owned firms. We show that the institutional form chosen matters for the initial investment decision of the agents: in particular we find that members of a cooperative invest less than they would in an investor‐owned enterprise.

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  • Alberto Bacchiega & Gianni De Fraja, 2004. "Constitutional Design and Investment in Cooperatives and Investor‐Owned Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(2), pages 265-293, June.
    • Handle: RePEc:bla:annpce:v:75:y:2004:i:2:p:265-293
    DOI: 10.1111/j.1467-8292.2004.00252.x
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    Cited by:

    1. Ayalew Ali & Bayelign Abebe, 2024. "Does corporate governance and balance sheet feature influence the financial policy of cooperatives? PLS-SEM approach," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-19, May.
    2. Stefano Zamagni & Vera Zamagni, 2010. "Cooperative Enterprise," Books, Edward Elgar Publishing, number 13842.
    3. Stefano Zamagni, 2005. "Per una teoria economico-civile dell'impresa cooperativa," AICCON Working Papers 10-2005, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    4. Stefano Zamagni, 2013. "Cooperative entrepreneurship," Chapters, in: Luigino Bruni & Stefano Zamagni (ed.), Handbook on the Economics of Reciprocity and Social Enterprise, chapter 9, pages 94-107, Edward Elgar Publishing.

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