IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v75y2004i2p265-293.html
   My bibliography  Save this article

Constitutional Design and Investment in Cooperatives and Investor‐Owned Enterprises

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-8292.2004.00252.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-8292.2004.00252.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Schmitz, Patrick W, 2001. "The Hold-up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 53(1), pages 1-17, January.
    2. Hart, Oliver & Moore, John, 1998. "Cooperatives vs. outside ownership," LSE Research Online Documents on Economics 19360, London School of Economics and Political Science, LSE Library.
    3. Bonin, John P & Jones, Derek C & Putterman, Louis, 1993. "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1290-1320, September.
    4. Eric Maskin & Jean Tirole, 1999. "Unforeseen Contingencies and Incomplete Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(1), pages 83-114.
    5. Hart, Oliver & Moore, John, 1996. "The Governance of Exchanges: Members' Cooperatives versus Outside Ownership," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 12(4), pages 53-69, Winter.
    6. Luca Anderlini & Leonardo Felli, 1999. "Incomplete Contracts and Complexity Costs," Theory and Decision, Springer, vol. 46(1), pages 23-50, February.
    7. Michael Kremer, 1997. "Why are Worker Cooperatives So Rare?," NBER Working Papers 6118, National Bureau of Economic Research, Inc.
    8. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    9. Jonathan Levin, 2002. "A Theory of Partnerships," Theory workshop papers 505798000000000002, UCLA Department of Economics.
    10. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    11. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefano Zamagni & Vera Zamagni, 2010. "Cooperative Enterprise," Books, Edward Elgar Publishing, number 13842.
    2. Zamagni, Stefano, 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.
    3. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alan Schwartz, 2004. "The Law and Economics of Costly Contracting," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 20(1), pages 2-31, April.
    2. Cremer, Jacques & Khalil, Fahad, 1992. "Gathering Information before Signing a Contract," American Economic Review, American Economic Association, vol. 82(3), pages 566-578, June.
    3. Rosenkranz, Stephanie & Schmitz, Patrick W., 2003. "Optimal allocation of ownership rights in dynamic R&D alliances," Games and Economic Behavior, Elsevier, vol. 43(1), pages 153-173, April.
    4. Patrick W. Schmitz, 2001. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
    5. Saussier, Stephane, 2000. "Transaction costs and contractual incompleteness: the case of Electricite de France," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 189-206, June.
    6. Hart, Oliver & Moore, John, 1998. "Cooperatives vs. outside ownership," LSE Research Online Documents on Economics 19360, London School of Economics and Political Science, LSE Library.
    7. Schmitz, Patrick W., 2010. "Contractual solutions to hold-up problems with quality uncertainty and unobservable investments," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 807-816, September.
    8. Rey, Patrick & Tirole, Jean, 2007. "Financing and access in cooperatives," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 1061-1088, October.
    9. Schmitz, Patrick W., 2008. "Incomplete contracts, the hold-up problem, and asymmetric information," Economics Letters, Elsevier, vol. 99(1), pages 119-122, April.
    10. Paul Walker, 2013. "The ‘Reference Point’ Approach To The Theory Of The Firm: An Introduction," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 670-695, September.
    11. Daniel Danau, 2019. "Contract law and Contract theory. A survey and some considerations," Economics Working Paper Archive (University of Rennes & University of Caen) 2019-04, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    12. Fares, M’hand, 2005. "Quels fondements à l’incomplétude des contrats?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 81(3), pages 535-555, Septembre.
    13. Toru Suzuki, 2020. "Efficiently Imprecise Contracts," Working Paper Series 2020/07, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    14. Ian Smith, 2003. "The Law and Economics of Marriage Contracts," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 201-226, April.
    15. Spagnolo, Giancarlo & Calzolari, Giacomo, 2009. "Relational Contracts and Competitive Screening," CEPR Discussion Papers 7434, C.E.P.R. Discussion Papers.
    16. Alvarez, Sharon A., 2007. "Entrepreneurial rents and the theory of the firm," Journal of Business Venturing, Elsevier, vol. 22(3), pages 427-442, May.
    17. Schmitz, Patrick W., 2012. "The hold-up problem, innovations, and limited liability," Economics Letters, Elsevier, vol. 117(3), pages 841-843.
    18. Alan Schwartz & Joel Watson, "undated". "The Law and Economics of Costly Contracting," Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy Working Paper Series yale_lepp-1004, Yale Law School John M. Olin Center for Studies in Law, Economics, and Public Policy.
    19. Marcello D'Amato & Christian Di Pietro & Marco M. Sorge, 2019. "Serving the (Un)Deserving? The Allocation of Credit in Markets with Asymmetrically Informed Lenders," CSEF Working Papers 539, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    20. Evelina Mengova, 2014. "Quality of Institutions and Outsourcing," International Economic Journal, Taylor & Francis Journals, vol. 28(4), pages 639-659, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:75:y:2004:i:2:p:265-293. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.