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Are Workers Enterprises Entry Policies Conventional?

Author

Listed:
  • Michele Moretto

    (Universita' di Padova)

  • Gianpaolo Rossini

    (University of Bologna)

Abstract

One of the reasons why workers'enterprises (WE) still represent a relevant chunk of the economy may lay in some affinities with conventional profit maximizing firms. To provide a solid basis to this presumption, we compare the entry policies of WEs and conventional firms when size is set at entry and kept fixed afterwards. Even though short run differences remain between WEs and conventional firms, a long run coincidence appears in an uncertain dynamic environment. Endogenizing size and time of entry we see that the two kinds of firms enter at the same trigger market price and size. Both of them enter earlier and choose a dimension larger than the minimum efficient scale. This generalised coincidence may be another way to explain why WEs still make for an important share of the economy (Hesse and Cihàk, 2007) despite the ongoing mantra of their imminent demise.

Suggested Citation

  • Michele Moretto & Gianpaolo Rossini, 2008. "Are Workers Enterprises Entry Policies Conventional?," "Marco Fanno" Working Papers 0066, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0066
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    References listed on IDEAS

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    More about this item

    Keywords

    Workers' enterprises; entry; uncertainty; rigidity;
    All these keywords.

    JEL classification:

    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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