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Business Cooperatives as a social response to unemployment

Author

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  • Arvind Ashta

Abstract

Type of paper :Exploratory, descriptive, case studyObjectives: In the wake of the global crisis, the role of the financial markets is being questioned and new forms of social innovations focusing on stakeholder governance and cooperation are being experimented. This paper looks into one such social innovation.Design/ Methodology :This is a case study on a social innovation where the institutions are being transformed to introduce new legal forms. This is a cooperative of entrepreneurs where the entrepreneurs are salaried employees. The research is being based on a review of laws and regulation, literature review supplemented with exploratory interviews of such entrepreneurs.Key results: The paper finds out differences between these cooperatives and concepts such as nurseries and incubators. It explains the process of evolution of these cooperatives. It points out the limitations of the regulatory regime.Value: The financing of microentrepreneurs without subsidies is a problematic issue. Over-reliance on Microcredit places stress. The sharing of expenses and cost reduction leads to lower needs for microcredit. It also provides the microentrepreneurs a new form of governance and opportunities for networking, developing citizenship and social wellbeing.Impact: If adopted in other parts of the (developed) world, such cooperatives could help overcome downside risk, loss aversion, isolation and poverty traps of unemployment benefits.

Suggested Citation

  • Arvind Ashta, 2013. "Business Cooperatives as a social response to unemployment," Working Papers CEB 13-048, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/152681
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    More about this item

    Keywords

    Governance; cooperative; microfinance; local; social innovation; coopératives d'activités et d'emploi; CAE;

    JEL classification:

    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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