Productivity Gains and Firm Ownership: The Case of the French Worker Cooperatives

Abstract

In this study, we examine how different forms of ownership structure (worker cooperatives vs. traditional firms) affect firm productivity and performance. In particular, we analyze multi-method data from the French worker cooperatives’ movement (e.g., “SCOP”) to interrogate the relationship between ownership structure and productivity. We theorize, and find, that size and maturity are major predictors of the productivity of worker cooperatives. In a series of between and within-firm comparisons, we find that smaller and older SCOPs are more productive than comparable traditional firms. By contrast, larger and younger SCOPs face productive inefficiencies that hamper their overall performance. A survey of, and qualitative evidence gathered with, SCOP directors revealed the mechanisms that explain why productivity gains are associated with smaller and mature worker cooperatives. Specifically, workers in a limited in size and mature SCOP are (1) more motivated, (2) more productive, (3) more easily find a purpose in their job, (4) benefit more from higher group cohesion due to lower income inequalities, and (5) more likely to have clear and well-defined roles within the organization.