Entry, exit, and the business cycle: Are cooperatives different?

Abstract

The paper revisits the question of why there are so few labor-managed firms in capitalist economies. Using new data on France, we present a comparative empirical examination of entry and exit among worker cooperatives and conventional firms. We estimate identical equations explaining annual entry and exit flows for the two groups of firms and test for the equality of the coefficients estimated. We find that cooperative creations are more countercyclical, but the effect of the business cycle on exit is the same for both groups of firms. Other factors influencing entry include organizational density and suggest that support structures are important for cooperative entrepreneurship. Journal of Comparative Economics 34 (2) (2006) 295–316.