A Map of Property Rights in Italy and the Case of Co-operatives: An Empirical Analysis of Hansmann's Theory

Abstract

This paper develops an empirical analysis of the property rights theory by Henry Hansmann. Moreover, it analyses the rationale for the existence of co-operatives, and it describes their role in the Italian economy. After proposing a brief review of the theory, we investigate the dimension and the nature of co-operation in Italy, using 1991 Census data provided by the Italian National Institute of Statistics (ISTAT). We address two complementary issues: what are the main activities of co-operatives and which are the provinces with the highest 'intensity of co-operation'. Finally, we derive a map of property rights in Italy, that allows us to test Hansmann's hypotheses. Our findings show that, in accordance with theoretical predictions, worker co-operatives emerge in cleaning services, vigilance services, and road transport of goods, where employees' tasks are standardized and homogeneous, firms need a relative small amount of capital, and real investments are not firm-specific. Seller and customer co-operatives mainly arise in food and drink manufacturing and food and drink wholesale distribution, where firms have potential market power. Moreover, investor-owned firms are common in mining and manufacturing, where high real investments are required, and where investments are firm-specific. Finally, non-profit organisations are concentrated in the sectors of education and welfare services, characterized by asymmetric information between customers and firms, and where collective consumption goods are produced.