Cooperative Firms Research Articles

Sustainability Assessment of the Performance of Parmigiano Reggiano PDO Firms: A Comparative Analysis of Firms’ Legal Form and Altitude Range

Geographical indications (GIs), protected by the European Union with the collective marks of PDO (protected designation of origin), PGI (protected geographical indication), and TSG (traditional specialty guaranteed), play an important role in the social and economic system. They not only guarantee food needs, but promote correct consumer information, protect local food, and play a role in the environmental and social sustainability of rural areas. In Italy, Parmigiano Reggiano (PR-RE) PDO cheese is ranked second in foods with the GI protection mark by turnover. This research aims to assess the financial sustainability of the firms registered in the PR-RE PDO consortium using financial statement (FINSTAT) analysis. Financial ratios (FR) and the EM-Score were applied to assess firms’ performance, financial risk, and credit score. The analysis distinguished firms by legal form, cooperative and non-cooperative, and altitude range—plain hill and mountain. The main findings of the research were as follows: (1) a better performance of lowland non-cooperative firms and lower financial risk, (2) a longer duration of the inventory cycle of cooperative firms, and (3) a greater financial risk in mountain cooperatives. The results provide indications for improving firms’ performance and for designing financial instruments for the sector. To our knowledge, this is the first research to carry out an analysis of all the available FINSTATs of firms in the PR-RE PDO sector.

An alternative organizational model for a more democratic and equitable digital economy: A systematic literature review on platform cooperativism through the lens of stakeholder theory. Competitive advantages and challenges

AbstractPlatform cooperatives, namely, businesses that sell goods or services primarily through a website, mobile app, or protocol and commit to the principles of democratic governance and shared ownership, have lately been proposed as a more sustainable, equitable and, under certain conditions, even efficient alternative to the organizational model of commercial platforms. Accordingly, they have been presented as economic institutions capable of involving all their relevant stakeholders in an extended and inclusive governance structure. Nevertheless, this emerging literature is still characterized by the lack of a holistic and analytic framework connecting the dispersed studies on the topic through the lens of stakeholder theory and detailing strategic complementarities between these different stakeholders. Related to this point, while dealing with the competitive advantages and challenges of platform cooperatives, little reference has been made to the existing debate in governance theory about the advantages and challenges of cooperative firms as compared to capitalist ones. These research gaps motivated our literature review, which is the first comprehensive systematic review specifically focused on this topic. Given the still‐emerging character of the research object, our work also makes way for future updates as new contributions are gradually published.

The Role of The State in Capitalism and in A System of Cooperative Firms

The Role of The State in Capitalism and in A System of Cooperative Firms

Value Network Configuration and Competitiveness of Emerging Agricultural Cooperatives in the Central Free State of South Africa

Introduction: While many emerging agricultural cooperative firms in the Central Free State of South Africa remain inclined to progress into mainstream markets, conditions of market exclusion continue to dampen their predisposition to exploit competitive opportunities. Since cooperatives determined to reach their full market potential must contemplate competitive positions in their value networks, the business strategy literature on cooperative firms foregrounds the theoretical assertion that the value network configuration significantly influences competitiveness. Purpose: This conceptual study challenges the assertion that emerging agricultural cooperative firms’ value network configuration significantly influences their competitiveness. Methodology: Drawing on the transaction cost economics theory and a review of literature, the study sought to address the core constructs that constitute the claims, establishing, rather, that sustained competitive performance has a direct influence on the competitiveness of emerging agricultural cooperative firms. Findings: The findings suggest sustained competitive performance as the principal determinant of competitiveness and a function of the cooperative firms’ ability to navigate through transaction interaction dynamics and configurational influences. Originality: The study links industry structure and competition intensity to configurational influences, manifesting in various drivers and indicators determining sustained competitive performance, a novel concept underexplored in cooperative entrepreneurial literature.

Editorial: Cooperative Firms, Participatory Culture, and Contemporary Challenges. Essays in Honour of Johnston Birchall

Editorial: Cooperative Firms, Participatory Culture, and Contemporary Challenges. Essays in Honour of Johnston Birchall

Strengthening local economies through social capital: The role of cooperative firms in driving economic growth in Italy

AbstractThis paper aims to empirically explore the linkage between the cooperative sector and economic growth in Italian provinces (NUTS‐3), through a panel analysis covering the period between 2013 and 2019. We hypothesize that the cooperative sector can contribute to economic growth through its ability to generate social capital, thereby helping to mitigate market failures. The empirical analysis does not provide us with robust evidence of the positive connection between the cooperative sector as a whole and local economic growth. However, when we disaggregate the cooperative sector into ordinary and social cooperatives, we find intriguing results. Indeed, there is robust evidence of a negative relationship between the territorial distribution of ordinary cooperatives and economic growth, while for social cooperatives we find a positive relationship. We interpret these results as showing that the pursuit of general interest objectives, which allows the principle of mutuality to be extended to indirect forms of reciprocity, could make cooperative firms more effective in promoting the economic performance of territories. This is because they are more likely to generate bridging social capital that encourages the spread of generalized trust, a key factor in the advancement of modern market economies.

Regional resilience and the role of cooperative firms

PurposeThis paper aims to investigate the impact of cooperative firms on the patterns of regional economic resilience in Italy from 2008 to 2019.Design/methodology/approachThis study uses regional statistics to compute indices of resilience for both real GDP per capita and employment during both recovery and resistance periods. By means of a linear model, the authors investigate the relationships between indices of resilience and the cooperative presence, while controlling for a set of demographic, social and economic variables.FindingsThis study shows that during (and after) recessions such regional indices exhibit very different patterns, with notably poorer performance observed in Southern regions compared to the rest of the country. Furthermore, this study illustrates that the size of the cooperative employment improves the overall resilience of regional employment, especially during recovery periods.Social implicationsThe findings hint at policies enhancing the strength and scope of the cooperative movement as a driver of territorial resilience.Originality/valueTo the best of the authors’ knowledge, this is the first study in relating territorial resilience and the presence of a type of companies. This study performs the analysis at the regional level regarding cooperative enterprises. The new findings hint at some policies enhancing the strength and scope of the cooperative movement.

The Relationship Between Members’ Participation and Organizational Trust in Cooperative Firms: A Case of Dairy Cooperatives in Izmir Province/Turkey

Relationship between cooperative-member is very important for cooperatives to continue their activities successfully and effectively. Effective management of cooperative depends on participation of members in the process of cooperative management. The desire to participate in the management varies according to person to person. The main purpose of this study is to determine members’ organizational trust level and examine the willingness to participate of members' into the decision making process according to organizational trust level. Interviews were conducted with142 members in Izmir. Organizational Trust Inventory (OTI) was used. Factor analysis and cluster analysis were used to divide into groups to members’ organizational trust level. It has been determined that the members in the “non-trusting” group are more willing to participate in the management. Age, education and organizational trust, etc. have affected a willingness to participate in cooperative management. Professional management is necessary in order to raise economic and social profit of members. Cooperative leaders should not ignore the opinions of its members and they should also maintain good contact with members.

The Significance of Market Power in the Financial Sustainability of Emerging Agricultural Cooperatives in the Central Free State of South Africa: A Resource-based View

Introduction: Despite the accessibility of institutional support mechanisms to cooperative firms in South Africa, many emerging agricultural cooperatives in the Central Free State remain underrepresented in the mainstream market, thereby undermining their long-term financial sustainability. Yet, business sustainability literature on cooperative firms foregrounds the theoretical assertion that the existence of market power significantly influences financial sustainability. Purpose: The study set out to debunk the assertion that emerging cooperative firms in the Central Free State have market power that they can exert to increase their financial sustainability. Methodology: Drawing on the resource-based view theory and a review of literature, the study sought to establish whether market dynamics have a direct influence on the financial sustainability of emerging agricultural cooperative firms. Findings: The findings suggest that competition intensity and market concentration undermine the ability of the market power of cooperatives to positively predict long-term financial sustainability. Originality: The study links various indicators of financial sustainability to market power and establishes the influence of each of them on market power—an approach underexplored in entrepreneurial literature.

Stability Governance of E-commerce Supply Chain: Social Capital and Governance Mechanism Design Perspective

The supply chain is an important part for firms to maintain competitive advantages. With the development of the Internet industry, the complexity of the business environment faced by E-commerce firms has greatly increased. Additionally, unexpected events have occurred from time to time, which have seriously affected the stability of the E-commerce supply chain. Supply chain social capital comprises the resources obtained by firms in the supply chain network through reputation, status, trust, commitment, etc., which allows the firms in the supply chain to form an interdependent relationship. Supply chain social capital can generate sustainable competitive advantages for supply chain firms. Based on the theory of social capital, this paper analyzes the impact on supply chain collaboration and stability from the three dimensions of supply chain capital: structural capital, cognitive capital, and relational capital. The results show that supply chain social capital positively affects supply chain collaboration and affects the stability of the supply chain in indirect ways. At the same time, this paper also found that under different supply chain governance modes, there are differences in the relationship between supply chain social capital and supply chain collaboration, that the moderation effects of contractual governance are not significant, while relational governance has positive moderation effects on the relationship between supply chain structural capital, relational capital, and supply chain collaboration. The conclusion of this study provides a theoretical basis for E-commerce firms to improve the level of supply chain social capital, adopt informal relational governance to face market uncertainty, and then promote the stability of the supply chain. At the same time, it also provides practical reference for the management department to issue policies so as to promote mutual understanding between supply chain cooperative firms, and to form a harmonious supply chain relationship.

What do cooperative firms maximize, if at all? Evidence from Emilia‐Romagna in the pre‐Covid decade

AbstractThe Italian region Emilia‐Romagna ranks first among the world's most important cooperative districts. Using a unique dataset covering all firms registered in the region, we investigate the performance of active firms in the period 2010–18. By focusing on added value, employment and profits of cooperative firms as compared to conventional firms, we disentangle the differences between the average performance of the two types of companies and detect the presence of a “size effect” driving much of the difference between them. Moreover, our results strengthen previous empirical evidence about the behavior of cooperative firms: they seem to optimize a mixture of employment and profits, assigning a greater weight to the former during downturns and stagnation. Hence, as a type of firm, they look more resilient than conventional companies, at least as far as employment is concerned. Finally, we examine the regional logistics industry and compare also the productivity per employee in the two segments of the sector.

Open Team Production, the New Cooperative Firm, and Hybrid Advantage

We critically assess the comparative efficiency advantages and disadvantages of capitalist and cooperative firms using team production as a frame of reference. We revisit the debate about such (dis...

Quantifying the vulnerabilities of China’s corporate sector with contingent claims

This paper measures and analyzes the default risk and debt sustainability of China’s non-financial corporate sector both on an aggregate level and within a sector by employing the contingent claims approach (CCA). Our results suggest that the vulnerabilities of Chinese firms are heterogenous in terms of investment source, ownership group, corporate form, industry type, and geographic unit etc. First, foreign capital enterprises have a lower default risk than domestic capital enterprises. Within domestic capital enterprises, state-owned firms have the lowest default risk, whereas private and collective firms are most unsustainable despite that they have the highest returns on assets. Second, state-controlled firms, private stock limited firms, and Chinese foreign cooperative firms are least vulnerable in the state-owned corporate sub-sector, the private corporate sub-sector and the foreign corporate sub-sector, respectively. Third, all industries except the coal industry are sustainable by industry type. Fourth, the vulnerabilities of local state-owned sub-sectors are diverse across China’s administrative regions. Moreover, we provide robustness tests which support our findings. In Sum, our study shed key light on ensuring the soundness of China’s non-financial corporate sector and thereby maintaining the stability and sustainability of the Chinese economy.

The Capital Structure of Co-operative Firms: An International Comparative Study

Anecdotal evidence describes how co-operatives are facing a financial crunch, particularly since the economic crash of 2008. Co-operatives are considered to be at greater risk and less profitable than other companies because of the constraints on redistribution of profits and the choice to employ the most vulnerable workers. Moreover, in most countries, there are no specific policies or regulatory frameworks. Thus, the access public funds is hindered. Business, social and governance dimensions affects (mainly negatively) their access to external finance. The role of external financing becomes pivotal for initial success and further development of the co-operative. However, these firms may be able to count on internal sources, including capital from the social base and from management. Unlike other firms, the use of internal sources is not related to the redistribution of profits to owners. The balance between internal and external sources is a focal discussion point. This paper aims to analyse the composition of the capital of co-operatives. In particular, it focusses on the share of internal and external financing and tries to understand the similarities and differences among various typologies of co-operatives established in different countries and operating in different industries.

The Effects of Cooperative Compliance on Firms\u2019 Tax Risk, Tax Risk Management and Compliance Costs

In cooperative compliance programs, firms and tax administrations agree on cooperation instead of confrontation. Firms provide full transparency and advanced tax control frameworks. Tax administrations, in turn, offer certainty as to the tax treatment of complex transactions. In this study, we test how firms’ perceptions of tax risk, the quality of tax risk management, and compliance costs are related to cooperative compliance. To our knowledge, this is the first study that attempts to analyze both reasons for and consequences of participation in cooperative compliance programs. We examine the Austrian cooperative compliance pilot project known as horizontal monitoring that was aimed at large businesses and launched in 2011. We use survey data from representatives of firms participating in the pilot project and a sample of comparable firms under a traditional ex-post audit regime. We conduct group comparisons to test differences between these groups, as well as mediation analyses to shed light on more complex relationships between variables. Results show that horizontal monitoring firms perceive a significantly higher increase in tax certainty, which is associated with significant relative decreases in tax risk and compliance costs. Furthermore, while the quality of tax risk management upon entering the pilot project appears significantly higher for horizontal monitoring firms, they do not report greater improvement in tax risk management compared to the control group. These results are relevant for the development of cooperative compliance programs and the decision to participate in them.

Management of Schemes and Threat Prevention in ICS Partner Companies Security

An analysis of the recent major security incidents related to industrial control systems, revealed that most had been caused by company employees. Therefore, enterprise security management systems have been developed to focus on companies’ personnel. Nonetheless, several hacking incidents, involving major companies and public/financial institutions, were actually attempted by the cooperative firms or the outsourced manpower undertaking maintenance work. Specifically, institutions that operate industrial control systems (ICSs) associated with critical national infrastructures, such as traffic or energy, have contracted several cooperative firms. Nonetheless, ICT's importance is gradually increasing, due to outsourcing, and is the most vulnerable factor in security. This paper proposes a virtualized security management scheme for the resident cooperative firms in the industrial control infrastructure. Since such companies often cannot afford adequate investment in security, the scheme is to let an ICS company provide the virtualized system. One of its merits is the convenience of controlling a VDI server at the center. The cooperative firms were classified, based on their respective security levels, and statistics were collected throughout a four-year period for the results. This paper analyzes the policies and virtualization systems that have been applied to the security of the partner companies, which engaged in ICS security. A suitable model for ICS security was then proposed by analyzing their effects on the system efficiencies, based on the comparisons of the security inspection results obtained before and after virtualization. The proposed system is expected to contribute to industrial safety.

What Do Cooperative Firms Maximize, if at All? Evidence from Emilia-Romagna in the Pre-COVID Decade

The Italian region Emilia-Romagna ranks first among the world’s most important cooperative districts. Using a unique dataset covering all firms registered in the region, we investigate the performance of active firms in the period 2010-18. By focusing on employment, revenue and profits of cooperative firms as compared to conventional firms, we disentangle the differences between the average performance of the two types of companies and detect the presence of a “size effect” driving much of the difference between them. Moreover, our results strengthen previous empirical evidence about the countercyclical role of cooperative firms: they seem to optimize a mixture of employment and profits, assigning a greater weight to the former during downturns and stagnation. Finally, we examine the regional logistics industry and compare also the profitability of employees in the two segments of the sector.

The Italian Geography of Regional Resilience: The Role of Cooperative Firms

The Italian Geography of Regional Resilience: The Role of Cooperative Firms

Relevance of Entrepreneurial Orientation Strategy to Cooperative Business Organizations in Nigeria

This study examines the relevance of entrepreneurial orientation (EO) strategies to the success of cooperative business organizations. Primary data were collected through structured questionnaire from randomly sampled cooperative organizations. The data covered organizational characteristics, entrepreneurial orientation and performance of the cooperative firms. Descriptive analysis and structural equation model (SEM) were used to analyze the data. The findings show that entrepreneurial capacity of cooperative organizations to unlock prevailing market strategies is high. However, their level of aggressiveness for enhanced market competitiveness is low. Strong proclivity for high risk business is also low. The competitive aggressiveness of cooperative organization is found to be non-existent in the entrepreneurial framework. The findings suggest the need for review of business strategies of most cooperative entities.

Are cooperative firms more agile? A contingency perspective on small and medium-sized enterprises in agglomerations and peripheral areas

In this study of small and medium-sized enterprises (SMEs) operating in German key technology industries, we investigate whether cooperating with others is an effective strategy for SMEs to enhance their organizational agility. Taking a contingency perspective, we are specifically interested in whether this effect depends on the firm’s location in an agglomerated or a peripheral area. Results show that a greater number of cooperative relationships with others is positively associated with SMEs’ organizational agility. This effect is stronger for agglomerated than for peripheral firms, suggesting that agglomerated SMEs can seize the abundant opportunities to cooperate in order to counter agglomeration diseconomies such as organizational inertia and mimetic behavior. This finding highlights the importance of absorbing external knowledge gained in cooperative relationships for SMEs’ organizational agility. Thereby, the study offers a novel perspective on how agglomerated SMEs can actively prevent being negatively affected by the downsides of agglomerations.