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Cooperative firms in hard times

Author

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  • Simona Monteleone

    (University of Catania)

  • Francesco Reito

    (University of Catania)

Abstract

This paper develops a simple principal-agent model to determine the occupational choice of some individuals between entering the labor market as workers and setting up a labor-managed firm. The start-up requires external credit, which is provided by a monopolistic lender. We show that the occupational choice depends on both the reservation utility of workers and the loan profitability of the bank.

Suggested Citation

  • Simona Monteleone & Francesco Reito, 2018. "Cooperative firms in hard times," Small Business Economics, Springer, vol. 51(1), pages 171-179, June.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9929-8
    DOI: 10.1007/s11187-017-9929-8
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    References listed on IDEAS

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    1. Federica VIGANO & Andrea SALUSTRI, 2015. "Matching profit and Non-profit Needs: How NPOs and Cooperative Contribute to Growth in Time of Crisis. A Quantitative Approach," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 157-178, March.
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    6. Putterman, Louis & Skillman, Gilbert L., 1992. "The role of exit costs in the theory of cooperative teams," Journal of Comparative Economics, Elsevier, vol. 16(4), pages 596-618, December.
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    8. Bonin, John P & Jones, Derek C & Putterman, Louis, 1993. "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1290-1320, September.
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    10. Ben-ner, Avner, 1988. "The life cycle of worker-owned firms in market economies : A theoretical analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 10(3), pages 287-313, October.
    11. Russell, Raymond & Hanneman, Robert, 1992. "Cooperatives and the business cycle: The Israeli case," Journal of Comparative Economics, Elsevier, vol. 16(4), pages 701-715, December.
    12. Podivinsky, Jan M. & Stewart, Geoff, 2007. "Why is labour-managed firm entry so rare?: An analysis of UK manufacturing data," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 177-192, May.
    13. Becchetti, Leonardo & Castriota, Stefano & Tortia, Ermanno, 2009. "Productivity, wages and intrinsic motivation in social enterprises," AICCON Working Papers 66-2009, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    14. Brent Hueth & Philippe Marcoul & Roger G. Ginder, 2004. "Cooperative Formation and Financial Contracting in Agricultural Markets," Center for Agricultural and Rural Development (CARD) Publications 03-wp349, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    15. Udo Staber, 1993. "Worker Cooperatives and the Business Cycle: Are Cooperatives the Answer to Unemployment?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 52(2), pages 129-143, April.
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    Cited by:

    1. Maria Bastida & Alberto Vaquero García & Luisa Helena Pinto & Ana Olveira Blanco, 2022. "Motivational drivers to choose worker cooperatives as an entrepreneurial alternative: evidence from Spain," Small Business Economics, Springer, vol. 58(3), pages 1609-1626, March.
    2. Rosaria Distefano, 2024. "Occupational choice and entrepreneurship: From necessity to opportunity," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 225-247, March.

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