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Cooperatives and Property Rights: Hansmann’s Contribution

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  • Gaetano Cuomo

    (Associate Professor of Economics, Department of Law, Università di Napoli Federico II, Italy,)

Abstract

Hansmann’s theory explains the success of the traditional investor-owned firm in terms of transaction costs, asserting that the costs of ownership incurred by capitalist are lower with respect to the costs of contracting that other groups of patrons would have to incur for the acquisition of capital, through the instruments available to the market. The relatively low number of worker-owned firms, on the other hand, is mainly explained by the heterogeneity of the interests among the workers in a firm, which would lead to difficulties in taking collective decisions, thus sharply increasing the costs of ownership of this group of patrons. On the other hand, in traditional capitalist firms the inter-ests of the investors would be homogeneous, being aimed simply at maximizing the current value of their capital contribution.

Suggested Citation

  • Gaetano Cuomo, 2014. "Cooperatives and Property Rights: Hansmann’s Contribution," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(8), pages 34-43, August.
    • Handle: RePEc:mir:mirbus:v:4:y:2014:i:8:p:34-43
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    References listed on IDEAS

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