IDEAS home Printed from
   My bibliography  Save this article

Efficiency in Employee-Owned Enterprises


  • Saioa Arando
  • Monica Gago
  • Derek C. Jones
  • Takao Kato

    (Saioa Arando is Professor at Mondragon Unibertsitatea and Researcher at MIK S. Coop. Monica Gago is Professor at Mondragon Unibertsitatea and Researcher at MIK S. Coop. Derek C. Jones is Irma M. and Robert D. Morris Professor of Economics at Hamilton College. Takao Kato is W. S. Schupf Professor of Economics and Far Eastern Studies at Colgate University.)


The authors undertake the first econometric study of efficiency for Eroski, the largest member of the Mondragon group of worker cooperatives. Three types of stores are found within Eroski: 1) cooperatives with significant employee ownership and voice; 2) cooperatives with modest employee ownership and limited voice (known as GESPAs); and 3) conventional stores with no employee ownership. Key data are monthly observations—9,800 for supermarkets and 2,150 for hypermarkets (large superstores combining supermarkets and department stores). By estimating first-difference models, the authors find that hypermarket stores with cooperative ownership have significantly faster sales growth than do GESPA stores. For supermarkets overall, they find no significant differences in performance among the three types of stores. For a subgroup of small supermarkets, however, cooperatives outperform conventional stores. To investigate the mechanisms that help explain why cooperatives perform better, the authors provide additional evidence that takes into account the more extensive opportunities for employee involvement, training, and stronger economic incentives in cooperatives. While cooperative members are better paid than peers in comparable firms, individual data show that job satisfaction is lower for cooperative workers than for GESPA workers. Though this may reflect higher worker expectations in cooperatives, alternatively cooperatives may constitute a “high-stress work system.â€

Suggested Citation

  • Saioa Arando & Monica Gago & Derek C. Jones & Takao Kato, 2015. "Efficiency in Employee-Owned Enterprises," ILR Review, Cornell University, ILR School, vol. 68(2), pages 398-425, March.
  • Handle: RePEc:sae:ilrrev:v:68:y:2015:i:2:p:398-425

    Download full text from publisher

    File URL:
    Download Restriction: no


    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:sae:ilrrev:v:68:y:2015:i:2:p:398-425. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.