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46 Indus. & Lab. Rel. Rev. 103 (1992-1993)
Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison

handle is hein.journals/ialrr46 and id is 105 raw text is: LABOR-MANAGED COOPERATIVES AND PRIVATE FIRMS IN NORTH CENTRAL ITALY: AN EMPIRICAL COMPARISON WILL BARTLETT, JOHN CABLE, SAUL ESTRIN, DEREK C. JONES, and STEPHEN C. SMITH* The authors analyze the differences between the behavior of private firms and that of producer cooperatives in a matched sample of the two organizational types from the regions of Emilia Romagna and Toscana in North-Central Italy, where producer cooperatives are numerous. Individual firm-level surveys provide new detailed comparative data on key issues such as investment, productivity, wages, employment, and industrial relations. Differences between the two types of firm are found in labor relations, employment, pay, production methods, the relation- ship to the external market environment, and the level of economic performance. The authors find no significant differences in investment horizons or criteria for finance, despite theoretical assertions to the contrary. The cooperatives apparently have higher productivity, more labor-intensive production methods, lower income differentials, and a more tranquil industrial relations environment than the private firms. F OLLOWING the publication in 1958 of a seminal paper by Benjamin Ward, The Firm in Illyria, a voluminous theoretical economics literature emerged to analyze the behavior of the labor- managed firm, an idealized characteriza- tion of Western producer cooperatives and Yugoslav self-managed firms. Most of this literature has been comparative and has been motivated by the desire to investigate the effects of employee owner- ship and control on enterprise behavior, in comparison with privately owned *Will Bartlett is Research Fellow, School for Advanced Urban Studies, University of Bristol; John Cable is Professor of Managerial Economics, Univer- sity of Wales, Aberystwyth; Saul Estrin is Associate Professor of Economics, London Business School; Derek C. Jones is Professor of Economics, Hamilton College (Clinton, N.Y.); and Stephen C. Smith is Associate Professor of Economics, George Washing- ton University. profit-maximizing firms. Models have been set up of labor-managed firms and twin capitalist firms that differ in their objective functions, ownership arrange- ments, and incentive structure, and sev- eral competing hypotheses have been The authors thank Mario Nuti for providing the opportunity to undertake the research for this paper and for his continuing encouragement and support. They also thank Milica Uvalie, Nick Wilson, Alberto Zevi, Gaby Dei Ottati, and participants at the Conference of the European Association for Com- parative Economic Studies (Verona, September 1990) for useful comments and suggestions on an earlier draft of the paper. Bruno Giuliani, Amos Fregoli, Sheila Marnie, and Phil Hobbs also provided valuable assistance. The fieldwork and much of the early part of the research were undertaken within the research pro- gram The Effects of Employee Participation upon Enterprise Performance in Western Europe, di- rected by D. M. Nuti at the European University Institute, Florence, 1983-86. Will Bartlett's subse- Industrial and Labor Relations Review, Vol. 46, No. 1 (October 1992). © by Cornell University. 0019-7939/92/4601 $01.00

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