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On the Entry of Employee-Owned Firms: Theory and Evidence from U.S. Manufacturing Industries, 1870–1960

In: Advances in the Economic Analysis of Participatory & Labor-Managed Firms

Author

Listed:
  • Michael A. Conte
  • Derek C. Jones

Abstract

Abstract We outline an economic theory of choice of organizational form, concentrating on explaining the selection of contractual relations within employee-owned firms. We then test the theory on a new database of U.S. producer cooperatives and find that the theory is largely supported by the data. Our principal conclusion is that producer cooperative formations have been rather strongly responsive to variations in economic conditions. While procyclical theories are clearly rejected, countercyclical theories receive considerable support. Neither political motivations nor legal institutions, especially the existence of cooperative incorporation laws, appear to have accounted for a portion of cooperative formations on a systematic basis. Support organizations have significant positive impacts on the formation rate of new cooperatives.

Suggested Citation

  • Michael A. Conte & Derek C. Jones, 2015. "On the Entry of Employee-Owned Firms: Theory and Evidence from U.S. Manufacturing Industries, 1870–1960," Advances in the Economic Analysis of Participatory & Labor-Managed Firms, in: Antti Kauhanen (ed.), Advances in the Economic Analysis of Participatory & Labor-Managed Firms, volume 16, pages 1-31, Emerald Publishing Ltd.
  • Handle: RePEc:eme:aeapzz:s0885-333920150000016001
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    More about this item

    Keywords

    Employee ownership; cooperatives; labor-managed firms; entry; formation; J54; P13; D23; J33; J38;

    JEL classification:

    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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