IDEAS home Printed from https://ideas.repec.org/p/ctl/louvir/1998025.html
   My bibliography  Save this paper

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

Author

Listed:
  • Nyssens, Marthe

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Van der Linden, Bruno

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; Belgian National Fund for Scientific Research (FNRS))

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.

Suggested Citation

  • Nyssens, Marthe & Van der Linden, Bruno, 1998. "Embeddedness, cooperation and popular-economy firms in the informal sector," LIDAM Discussion Papers IRES 1998025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Oct 1998.
    • Handle: RePEc:ctl:louvir:1998025
    as

    Download full text from publisher

    File URL: http://sites.uclouvain.be/econ/DP/IRES/9825.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jones, Stephen R. G., 1987. "Union membership and employment dynamics," Economics Letters, Elsevier, vol. 25(2), pages 197-200.
    2. Simon, Herbert A, 1993. "Altruism and Economics," American Economic Review, American Economic Association, vol. 83(2), pages 156-161, May.
    3. repec:bla:econom:v:54:y:1987:i:215:p:355-65 is not listed on IDEAS
    4. Estrin, Saul & Jones, Derek C. & Svejnar, Jan, 1987. "The productivity effects of worker participation: Producer cooperatives in western economies," Journal of Comparative Economics, Elsevier, vol. 11(1), pages 40-61, March.
    5. Ben Rogaly, 1997. "Embedded markets: Hired labour arrangements in west Bengal agriculture," Oxford Development Studies, Taylor & Francis Journals, vol. 25(2), pages 209-223.
    6. Huizinga, F & Schiantarelli, Fabio, 1992. "Dynamics and Asymmetric Adjustment in Insider-Outsider Models," Economic Journal, Royal Economic Society, vol. 102(415), pages 1451-1466, November.
    7. Georges Christophre, 1994. "A Dynamic Macroeconomic Model of the Labor-Managed Economy," Journal of Comparative Economics, Elsevier, vol. 18(1), pages 46-63, February.
    8. Lindbeck, Assar & Snower, Dennis J, 1988. "Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach," American Economic Review, American Economic Association, vol. 78(1), pages 167-188, March.
    9. Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
    10. Marthe Nyssens, 1997. "Popular economy in the south, third sector in the north: are they signs of a germinating economy of solidarity?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 68(2), pages 171-200, June.
    11. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, April.
    12. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    13. Spinnewyn, Frans & Svejnar, Jan, 1990. "Optimal Membership, Employment, and Income Distribution in Unionized and Labor-Managed Firms," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 317-340, July.
    14. Will Bartlett & John Cable & Saul Estrin & Derek C. Jones & Stephen C. Smith, 1992. "Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison," ILR Review, Cornell University, ILR School, vol. 46(1), pages 103-118, October.
    15. Fehr, Ernst & Kirchsteiger, Georg, 1994. "Insider Power, Wage Discrimination and Fairness," Economic Journal, Royal Economic Society, vol. 104(424), pages 571-583, May.
    16. Philippe Hugon, 1996. "Incertitude, précarité et financement local : le cas des économies africaines," Revue Tiers Monde, Programme National Persée, vol. 37(145), pages 13-40.
    17. repec:bla:econom:v:51:y:1984:i:23:p:295-305 is not listed on IDEAS
    18. Kahana, Nava & Nitzan, Shmuel, 1989. "More on alternative objectives of labor-managed firms," Journal of Comparative Economics, Elsevier, vol. 13(4), pages 527-538, December.
    19. repec:bla:scandj:v:90:y:1988:i:4:p:575-84 is not listed on IDEAS
    20. Carruth, Alan A & Oswald, Andrew J, 1987. "On Union Preferences and Labour Market Models: Insiders and Outsi ders," Economic Journal, Royal Economic Society, vol. 97(386), pages 431-445, June.
    21. Steinherr, A. & Thisse, J. -F., 1979. "Are labor-managers really perverse?," Economics Letters, Elsevier, vol. 2(2), pages 137-142.
    22. repec:bla:econom:v:49:y:1982:i:194:p:141-46 is not listed on IDEAS
    23. Caputo, Michael R., 1992. "Comparative dynamics in the labor-managed model of the firm," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 272-286, June.
    24. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    25. Kahana, Nava & Nitzan, Shmuel, 1993. "The Theory of the Labour-Managed Firm Revisited: The Voluntary Interactive Approach," Economic Journal, Royal Economic Society, vol. 103(419), pages 937-945, July.
    26. repec:bla:econom:v:61:y:1994:i:242:p:179-89 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alper Duman, 2009. "Comparative Analysis of Organizational Forms in the Software Industry and Legal Services," Working Papers 0903, Izmir University of Economics.
    2. Bauwens, Thomas & Lemaître, Andreia, 2014. "Popular Economy in Santiago de Chile: State of Affairs and Challenges," World Development, Elsevier, vol. 64(C), pages 65-78.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Franz, Wolfgang, 1993. "Unvollkommene Arbeitsmärkte in makroökonomischen Modellen: Eine Übersicht," Discussion Papers 1, University of Konstanz, Center for International Labor Economics (CILE).
    2. Francisco Cabo & Angel Martín-Román, 2019. "Dynamic collective bargaining and labor adjustment costs," Journal of Economics, Springer, vol. 126(2), pages 103-133, March.
    3. Harbaugh, Rick, 2005. "The effect of employee stock ownership on wage and employment bargaining," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 565-583, September.
    4. Kai-Uwe Kuuhn & A. Jorge Padilla, 2002. "Union Power, Replacement and Labour Market Dynamics," Economic Journal, Royal Economic Society, vol. 112(479), pages 317-343, April.
    5. Burdín, Gabriel & Dean, Andrés, 2012. "Revisiting the objectives of worker-managed firms: An empirical assessment," Economic Systems, Elsevier, vol. 36(1), pages 158-171.
    6. 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.
    7. Dow,Gregory K., 2019. "The Labor-Managed Firm," Cambridge Books, Cambridge University Press, number 9781107589650, September.
    8. Marco Guerrazzi, 2020. "Wage and employment determination in a dynamic insider–outsider model," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 1-23, January.
    9. Lin, Chung-cheng & Yang, C.C., 2008. "The firm as a community explaining asymmetric behavior and downward rigidity of wages," Journal of Economic Behavior & Organization, Elsevier, vol. 68(2), pages 390-400, November.
    10. Jesús CLEMENTE & Millán DIAZ-FONCEA & Carmen MARCUELLO & Marcos SANSO-NAVARRO, 2012. "The Wage Gap Between Cooperative And Capitalist Firms: Evidence From Spain," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 83(3), pages 337-356, September.
    11. Polterovich, Victor, 2000. "Employment- wage decisions in the insider-owned firm," BOFIT Discussion Papers 1/2000, Bank of Finland, Institute for Economies in Transition.
    12. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    13. Graham Pyatt, 1986. "Inertia in Labor Markets," Eastern Economic Journal, Eastern Economic Association, vol. 12(3), pages 243-250, Jul-Sep.
    14. Jean-Pierre Danthine & John B. Donaldson, 1990. "Risk sharing, the minimum wage, and the business cycle," Working Papers hal-01541387, HAL.
    15. Muysken, J. & Zwick, Th., 1996. "Insider power breeds human capitalists," Research Memorandum 030, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    16. Sebastián Berazategui & Emilio Landinelli & Daniel Ramírez, 2013. "Una comparación del comportamiento innovador entre Cooperativas de Trabajo y Empresas Capitalistas en Uruguay," Documentos de Investigación Estudiantil (students working papers) 13-02, Instituto de Economía - IECON.
    17. John W. Budd & Jozef Konings & Matthew J. Slaughter, 2005. "Wages and International Rent Sharing in Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 73-84, February.
    18. Steinar Holden, 1990. "Insiders and outsiders in labour market models," Journal of Economics, Springer, vol. 52(1), pages 43-54, February.
    19. Tortia, Ermanno C., 2021. "Employment protection regimes and dismissal of members in worker cooperatives," MPRA Paper 109214, University Library of Munich, Germany.
    20. Vontalge, Alan L., 1991. "A feasibility study of swine producer management cooperatives," ISU General Staff Papers 1991010108000018168, Iowa State University, Department of Economics.

    More about this item

    Keywords

    embeddedness; cooperation; labor-managed firms; Popular-economy firm;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctl:louvir:1998025. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Virginie LEBLANC (email available below). General contact details of provider: https://edirc.repec.org/data/iruclbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.