The effects of workers’ participation in governance, ownership and profit sharing on the economic performance of worker cooperatives. An empirical analysis of 1200 French SCOP

Fanny Dethier | Jacques Defourny

EMES Conferences Selected Papers Series, ECSP-5EMES-39

A production activity results from the association of both labor and capital. The alliance between those two inputs makes a company able to perform its economic activity but unable to leave aside neither one nor the other. Therefore, why does the decision-making power of most companies end up in the hands of capital owners only?

Many economists, starting with the utopian socialists of the nineteenth century, have raised this question. At that time, the questioning of the association between power and capital ownership as well as the willingness to incorporate democratic principles in business world led to the launch of initiatives based on so-called cooperative or self-management principles.
Nowadays, this question becomes more relevant than ever. The supremacy of capital along with the shareholder’s search for the maximization of short-term profit are seen by many as responsible for the recession that Western economies have just come through. The gaps in our capitalist model highlighted by the crisis lead us to explore other business conceptions such as the cooperative, and in particular the worker cooperative. Specifically, we propose to study here the economic relevance of this business model, and in particular, the impact of workers’ participation in its economic performance.

From a theoretical and empirical point of view, workers’ participation in governance, ownership and profit-sharing seems to have ambiguous effects on companies’ efficiency. Workers’ participation, regarded sometimes as an incentive to make an extra effort, sometimes as an additional cost, has fueled many theoretical and empirical scientific debates, especially in the 1970’s and 1980’s marking the end of “The Glorious Thirty”. Today, in a Europe struggling to find the growth path, it makes sense to try to update the debate. In this perspective, we will conduct our own analysis by studying the case of French Sociétés Coopératives et Participatives (SCOP).
This article begins with an overview of theoretical works about self-managed companies’ economic performance. A second section will come back on the previous studies exploring the field of workers’ participation. Then, in a third section, we present the model thanks to which we will address the issue as well as the database we use. Our approach is based on the estimation of a production function “augmented” by variables apprehending the different forms of participation. Our econometric estimations will of course be discussed in a forth section and we will conclude with a summary of our main results.

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