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Cooperative firms and the crisis: evidence from some Italian mixed oligopolies

  • F. Delbono
  • C. Reggiani

We investigate how cooperative firms reacted to the current crisis. This allows us to compare the behavior of cooperative and conventional firms facing exogenous shifts in demand. After a short survey of a stream of theoretical literature, we analyze a large group of Italian production cooperatives in the periods 2003-2010 and 1994-2011 and we contrast co-ops behavior with the overall trend in the industries in which they operate. Our sample’s evidence suggests that the cooperative’s behavior has a stabilizing effect on employment with respect to shocks in output demand. Unlike profit-maximizers, cooperative firms seem to be adjusting pay more than employment when facing shocks. Production co-ops look better equipped than their profit-maximizing counterparts in tackling the long recession also because they have been very cautious in their profit policies over time. Unlike conventional firms, they have significantly increased their own equity during “good” years instead of distributing large dividends to their members.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp884.

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Date of creation: Jun 2013
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Handle: RePEc:bol:bodewp:wp884
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  1. Gal-Or, Esther & Landsberger, Michael & Subotnik, Abraham, 1980. "Allocative and distributional effects of a monopolistic cooperative firm in a capitalist economy," Journal of Comparative Economics, Elsevier, vol. 4(2), pages 158-172, June.
  2. Cremer, Helmuth & Cremer, Jacques, 1992. "Duopoly with employee-controlled and profit-maximizing firms: Bertrand vs Cournot competition," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 241-258, June.
  3. de Fraja, Giovanni & Delbono, Flavio, 1990. " Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
  4. Horowitz, Ira, 1991. "On the effects of cournot rivalry between entrepreneurial and cooperative firms," Journal of Comparative Economics, Elsevier, vol. 15(1), pages 115-121, March.
  5. Burdín, Gabriel & Dean, Andrés, 2009. "New evidence on wages and employment in worker cooperatives compared with capitalist firms," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 517-533, December.
  6. John Pencavel & Luigi Pistaferri & Fabiano Schivardi, 2006. "Wages, Employment, and Capital in Capitalist and Worker-Owned Firms," ILR Review, Cornell University, ILR School, vol. 60(1), pages 23-44, October.
  7. Craig, Ben & Pencavel, John, 1992. "The Behavior of Worker Cooperatives: The Plywood Companies of the Pacific Northwest," American Economic Review, American Economic Association, vol. 82(5), pages 1083-105, December.
  8. Delbono, Flavio & Rossini, Gianpaolo, 1992. "Competition policy vs horizontal merger with public, entrepreneurial, and labor-managed firms," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 226-240, June.
  9. Burdín, Gabriel & Dean, Andrés, 2012. "Revisiting the objectives of worker-managed firms: An empirical assessment," Economic Systems, Elsevier, vol. 36(1), pages 158-171.
  10. Hill, Martyn & Waterson, Michael, 1983. "Labor-managed Cournot oligopoly and industry output," Journal of Comparative Economics, Elsevier, vol. 7(1), pages 43-51, March.
  11. Mai, Chao-Cheng & Hwang, Hong, 1989. "Export subsidies and oligopolistic rivalry between labor-managed and capitalist economies," Journal of Comparative Economics, Elsevier, vol. 13(3), pages 473-480, September.
  12. Craig Ben & Pencavel John, 1993. "The Objectives of Worker Cooperatives," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 288-308, June.
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