Co‐operative enterprise anti‐cyclicality and the economic crisis: A comparative analysis of employment dynamics in Italy

The theoretical and empirical literature reports that worker co‐operatives protect employment better than investor‐owned firms (IOFs) do, especially during economic downturns. This paper introduces the new hypothesis that not only worker co‐operatives but all co‐operative types (e.g. worker, producer, consumer, credit) protect employment better than IOFs do because they all satisfy their members’ needs—instead of maximizing shareholder value—by delivering a stable stream of goods and services. A long‐standing pattern in needs satisfaction implies constant activity and employment. To substantiate our hypothesis theoretically, we resort to the evolutionary interpretation of the firm as a problem solver and to the literature on organizational resilience. We test the hypothesis using the data released by the Italian Institute of Statistics for all Italian enterprises in the 1996–2008 pre‐crisis and 2008–15 crisis periods. Dynamic multifactor partitioning confirms that in Italy, all typologies of co‐operatives withstood the crisis better than other business forms did and that co‐operatives were affected the least by economic cyclicality and employment loss.