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Embeddedness, cooperation and popular-economy firms in the informal sector

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  • Nyssens, Marthe
  • Van der Linden, Bruno

Abstract

This paper is motivated by empirical observations on popular-economy firms (PEFs) in the informal sector of Santiago de Chile. These are labor-managed firms embedded in popular milieu where cooperation between their members plays a central role. This paper develops a (partial equilibrium) microeconomic theory of PEFs. First, it endogeneizes the level of cooperation between the workers. Second, it develops a static and a dynamic model to analyze whether embeddedness influences the behavior of the PEF. Embeddedness is assumed to be captured by three different characteristics suggested by the empirical observations. Most of them influence the employment and income levels in the PEF.
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Suggested Citation

  • Nyssens, Marthe & Van der Linden, Bruno, 2000. "Embeddedness, cooperation and popular-economy firms in the informal sector," Journal of Development Economics, Elsevier, vol. 61(1), pages 175-204, February.
    • Handle: RePEc:eee:deveco:v:61:y:2000:i:1:p:175-204
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    Cited by:

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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