Annals of Public and Cooperative Economics

Published by Wiley

Online ISSN: 1467-8292


Print ISSN: 1370-4788


Moral hazard and labour-managed firms in Italy after the law n. 142/2001
  • Article

June 2008


30 Reads

Francesco REITO
Instead of focusing on the difference between a labour-managed (LMF) and a profit maximizing firm (PMF) in terms of final out-come and occupation, this paper considers the actual possibility for a firm to be financed from outside. A simple case of moral hazard in the credit market is analyzed. A bank, for limited funds, can finance one of two potential firms, a LMF or a PMF, both with similar project size. The Italian case is taken into account: the law n. 142/2001 has equalized the position of workers and members of a LMF as (own) firm creditors during a liquidation. This has an effect on the structure of creditors priorities in case a firm goes bankrupt and, in particular, on money-lenders likelihood of getting their loans back. It is argued that, before the law, the LMF had in general an advantage on the PMF, from banks viewpoint, for it faced a lower moral hazard problem on effort contribution. After the law, even though the direct consequence seems to be a draw back in LMF credit-worthiness, the model shows that, on given conditions, this type of firm remains more competitive as a bank borrower. Copyright © 2008 The Authors Journal compilation © CIRIEC 2008.

Efficiency and survival: The impact of the international coffee agreement's demise on costa rica's cooperative coffee processing, 1988-2005

March 2008


74 Reads

This paper uses a profit per member (or dividend) frontier model to analyze the impact of the 1989 demise of the International Coffee Agreement on a group of Costa Rican coffee processing cooperatives. Firm-level data on costs span the period from 1988/89 to 1992/93 and information on cooperative survival covers 1988/89 to 2004/05. The more efficient member-owned enterprises survived the crisis. An increasing cost of servicing the smallest farmers may constitute an incentive to restrict membership, however. Dividends fall as investor-owned firms compete to buy farmers' raw coffee. Still, member loyalty does enable cooperative processors to maintain scale economies and market share. Despite several bankruptcies, cooperative firms in Costa Rica processed 40 percent of the national crop in 2004/05, the same proportion as in 1988/89. Copyright © 2008 The Author Journal compilation © CIRIEC 2008.

Les banques coopératives françaises dans les années 1990–2000 : spécialisation des activités et performance

December 2007


25 Reads

Cet article porte sur les transformations et les stratégies d'adaptation des banques coopératives françaises induites par la réforme du système financier français et la globalisation financière. Il examine l'ampleur de la banalisation au niveau des activités de crédit des réseaux bancaires coopératifs ainsi que leurs performances. Il est montré que les réseaux bancaires coopératifs maintiennent une spécialisation assez importante de leurs propres activités de crédit, dont le corollaire est une diversification au niveau des groupes coopératifs. Ces réseaux ont également un pouvoir de marché croissant et une rentabilité meilleure que les banques commerciales pendant la période 1992-1999 et comparable pour la période suivante. Enfin, les banques coopératives présentent l'avantage de permettre aux pouvoirs publics de conserver, compte tenu du caractère «non opéable» de ces réseaux, leur capacité d'influence sur les stratégies bancaires tout en respectant les règles du jeu de l'Espace financier européen et de la globalisation financière. Copyright 2007 The Author Journal compilation © CIRIEC 2007.

Uk Corporate Acquisitions In Latin America In The 1990s: Lost Opportunities In A New Economic Environment

February 2002


34 Reads

During the 1990s, foreign direct investment flowed into Latin America at an unprecedented rate. Capital inflows associated with privatizations and private mergers and acquisitions (M&As) rose steeply. Drawing on original firm-level transactions data, this article examines the extent to which UK enterprises participated in the Latin American privatization and private M&A boom. The authors conclude that, relative to their counterparts in many other major industrial countries, UK enterprises adopted a cautious stance, largely eschewing privatization opportunities and concentrating M&A activities on relatively few operations, sectors and countries, in order to strengthen product and market positions. Moreover, the strategic logic guiding the most important corporate acquisitions centred on gaining access to domestic markets rather than attempting to create global export platforms. Copyright 2002 CIRIEC.

The Differential Returns Offered by Mutually Owned and Proprietary UK Depository Institutions: 1993-2000

June 2003


16 Reads

The study quantifies the differences in the level of return from investing in deposit (savings) accounts provided by depository institutions, which are either 'mutual' or 'proprietary'. It is shown that for most types of deposit accounts offered in the UK, mutual building societies provide higher returns than proprietary firms. Surprisingly, it is also shown that returns from deposit accounts issued by converted or non-mutual building societies are, generally, lower than either mutual building societies or proprietary firms. These findings are consistent for interest rate data adjusted for the effect of non-price product characteristics and for unadjusted interest rate data. Copyright CIRIEC, 2003.

Production et rationalisation des intermédiaires financiers: Leçons à tirer de l'expérience des Caisses Populaires Acadiennes

February 2003


52 Reads

Resume Nous mesurons à l’aide du DEA (Data Envelopment Analysis) l’efficacité des caisses populaires acadiennes en utilisant la valeur des produits d’intermédiation ainsi que le nombre de transactions réalisées par chaque caisse entre 1997 et 2000, au moment où un important programme de fusions et de réingénierie financière était mis en place. Cette analyse permet d’établir plusieurs résultats. Tout d’abord, l’inclusion des produits transactionnels réduit environ de moitié l’inefficacité technique et économique par rapport à l’inefficacité obtenue lorsque l’output des caisses est limité seulement aux produits transactionnels. Un algorithme d’auto‐amorçage permet de vérifier que ce résultat est statistiquement significatif. Ensuite, nous montrons que le programme de fusions a touché surtout les caisses moins efficaces et a permis d’augmenter de façon importante leur efficacité grâce à une baisse du nombre d’employés en équivalent temps complet. Finalement, nous montrons que d’importants progrès technologiques ont été réalisés entre 1997 et 2000 en raison de l’accroissement du nombre de transactions informatisées. Des gains additionnels de productivité ont été rendus possible grâce à l’amélioration de l’efficacité des caisses ayant participéà une fusion tandis que les caisses n’ayant pas fusionné, bien que plus efficaces au départ que les autres, n’ont pas réalisé de gains d’efficacité.

Russian Railways Reform and the Problem of Non-discriminatory Access to Infrastructure

February 2004


138 Reads

Restructuring of the Russian railways system is well under way. Among the policies just now coming into practice are two that are standard in railways restructuring in other countries: the provision of access to the infrastructure by independent train operating companies, and assurances of non-discriminatory access terms for such companies. However, 'discrimination'- in the traditional economic sense - is a standard and often welfare-enhancing pricing strategy for the recovery of fixed costs in a sector, like railways, with declining average costs. If competition regulators are unable to distinguish between discrimination that harms competition and discrimination designed only to recover fixed costs, policy makers in Russia and elsewhere will face a choice between large government subsidies and large welfare losses. In these circumstances, other restructuring models should be considered. Copyright CIRIEC, 2004.

Accounting for the social economy: The socioeconomic impact statement

June 2006


1,180 Reads

Organizations within the social economy have unique characteristics, yet their accounting procedures do not reflect this uniqueness, and rather are designed for private-sector organizations that exchange their goods and services in the market. We argue that conventional accounting creates a perception that social economy organizations are users of resources and separate from the private and public sectors, rather than creators of value and an integral part of our society (Quarter, Mook, and Richmond, 2003a). This paper addresses the accounting needs of social economy organizations by presenting a model of social accounting-the Socioeconomic Impact Statement-that may help bring out the impact of such organizations. The paper presents a demonstration project of the potential utility of the Socioeconomic Impact Statement. Copyright CIRIEC, 2006.

The usefulness of accounting information in the measurement of technical efficiency in agricultural cooperatives

March 2008


409 Reads

The study of the performance of agricultural cooperatives has become increasingly important in recent years, due to the significant role that they have in the agricultural food sector. In this context, the present study has a double aim: On one hand to use the Data Envelopment Analysis (DEA) technique in order to measure the efficiency of agricultural cooperatives, and on the other hand, to analyse if this technique is complementary to the traditional economic and financial ratio analysis. In order to achieve these objectives, an empirical study is carried out using the data of 247 observations made over a horizontal time span of three accounting years (2001-2003). The results show that the efficiency measures obtained by means of the DEA technique are an appropriate complement to the economic analysis of agricultural cooperatives. Copyright © 2008 The Author Journal compilation © CIRIEC 2008.

Percentage of organizations in which each stakeholder group enjoys dominant control over strategic decision-making, by type of organization and by industry
A comparative study of allocation of decision-making across stakeholder groups: The case of personal care industries
  • Article
  • Full-text available

December 2010


59 Reads

The article compares the allocation of decision-making across stakeholder groups in for-profit, nonprofit and local government personal care facilities in one state in the United States. We analyze detailed survey data on nursing homes, childcare centers and group homes. We find that in comparison to nonprofit and government organizations, for-profit firms delegate more decision-making power to executives and owners, and less to their employees, consumers, families, boards of directors, and community representatives. The differences, although generally small, support the hypothesis that decision-making is allocated to different groups in accord with the broad objectives of the organization. Copyright © 2010 The Authors Annals of Public and Cooperative Economics © 2010 CIRIEC.

Regulating Public Transit Networks: How Do Urban-Intercity Diversification and Speedup Measures Affect Firms' Cost Performance?

February 2004


144 Reads

Empirical studies on the cost structure of Public Transit Networks are mainly based on specialized firms providing urban or intercity services. In this study we estimate a translogarithmic variable cost function to assess the behaviour of returns to scale and the impact of network characteristics. The analysis is based on a sample of 45 Italian municipal companies observed from 1996 to 1998 and including both specialized and mixed transit operators. Results confirm previous evidence on the existence of natural monopoly in the industry and support a regulation introducing competitive tenders to access to the market. In addition, we provide insights about the advantages associated with urban-intercity diversification and with the improvement of network commercial speed. Cost benefits can then be achieved by promoting mergers between neighbouring firms, so as to create new companies operating on integrated local networks and supplying in combination urban and intercity public transport. Implications of such a strategy for the design of tender mechanisms are also underlined, together with the need for a regulatory policy which takes more care of speed-up measures. Copyright CIRIEC, 2004.

Privatization and Indigenous Ownership: Evidence from Africa

December 2002


59 Reads

In recent years, privatization has become common across Africa, reversing the long-term growth in state ownership of business enterprises. Many have interpreted this as entailing the abandonment of the developmental objectives that state enterprises were established to pursue. Others, however, have suggested that the privatization process can itself provide a new means through which the same objectives may be achieved. This article examines the potential for privatization to be used to promote indigenous ownership. This objective was pursued in newly independent states across Africa and today remains an aim of many of the governments undertaking privatization. The article provides a typology of the range of measures that can be employed to promote indigenous ownership in the context of privatization. It examines those used in the Zambian privatization programme, assessing the degree to which they have been successful and the obstacles they have faced. Finally, it concludes with a comparison of the Zambian case with other African experiences. Copyright 2002 CIRIEC.

Reinventing the Wheel? African Cooperatives in a Liberalized Economic Environment

September 2009


489 Reads

Cooperative development in Africa can be said to have traversed two main eras: the era of state control and that of liberalization. The first era lasted up to the early 1990s and saw the origin and substantial growth of cooperatives on the continent. During that period, different models of cooperative development were introduced on the continent. We distinguish a unified cooperative model, a social economy model, a social movement model, a producers' model and an indigenous model. But in all cases, cooperatives were engulfed into state politics. However, little is known about the impact of liberalization measures on these models. Our research in 11 African countries reveals that cooperatives in Africa have survived the market forces and continued to grow in number and membership. We see a slow but sure erosion of the unified model and the adoption of a social economy model. Cooperatives in Africa are re-examining their organizational forms and diversifying their activities in response to members' interests and needs. Copyright © 2009 The Author Journal compilation © CIRIEC 2009.

Agency costs of third-party financing and the effects of regulatory change on utility costs and factor choices

December 2007


14 Reads

Beginning in 1999, the Canadian Province of Ontario undertook restructuring and tried to implement performance based regulation for local electricity distribution utilities. Regulatory parameters were based on productivity research covering 1988-1997 that found little productivity difference by size, but wide variations in costs, factor mix, financing, and returns to capital among utilities. While some utilities questioned their ability to improve efficiency, other observers maintained many utilities were over-capitalized, especially from third-party financing paid by customers for connection/development charges; these observers noted that rates, profits, and valuations would be inflated. Despite its pervasive use, we can find no literature dealing with the implications of third-party funding. We assess the effects and adjustment dynamics of regulatory and financing changes on costs, factor mix, and performance. Copyright 2007 The Authors Journal compilation © CIRIEC 2007.

Australian credit unions and the demutualization agenda

June 2007


286 Reads

There is a strong prospect of widespread demutualization occurring in the Australian credit union industry in coming years. This paper explains the reasons for this phenomenon, identifies some potentially undesirable social consequences, and examines the relative merits of alternative types of demutualization process. It identifies a number of principles which warrant reflection in the design of legislation addressing demutualization processes. Copyright 2007 The Authors Journal compilation © CIRIEC 2007.

Predicting financial failure: some evidence from New Brunswick agricultural co-ops

June 2005


277 Reads

Given the essential role co-ops play in the Canadian economy, the primary purpose of this paper is to develop methods to forecast their likelihood of insolvency. However, investor-owner firms form the basic unit of analysis of most popular bankruptcy predictors used in Canada. The question is whether the key underlying elements that differentiates the latter from co-ops justifies deriving specific bankruptcy prediction formulas exclusively for each type of business organization. To that effect, this research evaluates the efficacy of these current predictors and suggests an improved predictor for agricultural co-operatives. Copyright CIRIEC, 2005.

Social Economy Companies in the Spanish Agricultural Sector: Delimitation and Situation in the Context of the European Union

September 2003


46 Reads

On the basis of the definitions that have found the greatest acceptance among the scientific community, this paper identifies the business formulas that comprise the Social Economy in the agri-food sector with reference to the case of Spain, for which the latest data and figures are presented. At the same time, it presents a comparative study with agricultural cooperatives in the European Union, using the cluster analysis method, in order to place the business situation of Spanish cooperatives within this context. Copyright CIRIEC, 2003.

Why do Agricultural Credit Cooperatives Merge? The Portuguese Experience

September 2005


170 Reads

Over the last decade, increasing financial problems in the Portuguese Agricultural Credit Cooperatives (ACCs), mainly difficulty in gathering equity, have forced them to pursue an intensive merger activity. This paper describes the economic reasons that have led the ACCs to merge, and analyses the ex post merger impact on their economic performance. The results show that: (a) incorporating ACCs are larger, more profitable and hold a better credit management; (b) incorporated ACCs are smaller, face difficulties in reaching a minimum efficient scale and have weaker credit management as well as leverage problems; and (c) merged ACCs have a heavy administrative cost structure and also face profitability problems. Regarding the mergers' ex post impact on the ACCs performance, we find no positive influence on cost reduction, credit management and solvency ratio. Copyright CIRIEC, 2005.

Auctions Versus Beauty Contests: The Allocation of UMTS Licences in Europe

March 2003


126 Reads

The deployment of the so-called UMTS 3rd generation mobile networks is a step of vital importance for the promotion of competition in the telecommunications sector. The provision of high-traffic services presupposes that operators have access to the hertzian spectrum. The hertzian spectrum is a natural resource whose scarcity derives from the fact that only part of it is usable, for both technical and economic reasons. While the resource was sufficient to meet users' needs, the hertzian spectrum was allocated for little or no charge, on the principle of ‘first come, first served’. However, with the explosion of technical progress in transmission technologies, new applications and new forms of use appeared, leading to a drastic increase in potential demand. It is in this context that the idea of charging for use of the spectrum arose, so as to discourage uneconomical use of the resource (e.g. stockpiling, wastage), to ensure a fair allocation between competing users and to forestall congestion. The purpose of this paper is first to examine the procedures for the allocation of hertzian spectrum operating licences, from the points of view of efficiency, transparency and sharing of the surplus. We shall then compare the results from the two approaches that were actually used in Europe: the open ascending auction and the beauty contest, before turning our attention to new forms of public action that result from the process of liberalization.

Differences in Financial Performance Amongst Spanish SMEs According to Their Capital-Ownership Structure: A Descriptive Analysis

March 2010


86 Reads

The purpose of this paper is to assess whether financial performance differences between labour-managed (LOFs) and mercantile (PCFs) firms are due to differences in their capital-ownership configuration or to the particular measurement indexes commonly used to quantify performance. The empirical evidence rests upon a 1994-2003 data set of LOFs and PCFs that operate in the Industrial and Services sectors of the economy of Navarre, Spain. The results do not detect significant differences in financial performance between LOFs and PCFs, especially in the long-term and suggest the need to develop performance indices more akin to the special nature of the LOFs. Copyright © 2010 The Authors Journal compilation © CIRIEC 2010.

Loyauté et performance: Une analyse empirique dans un réseau Coopératif bancaire

June 2009


55 Reads

Dans cet article, nous analysons la relation entre l'orientation-marché, la position concurrentielle, la loyauté et la performance financière de l'entreprise. L'analyse empirique, basée sur une approche d'équations structurelles, est menée en contexte coopératif. Notre modèle s'appuie sur l'approche des ressources et intègre les inputs opérationnels, le profil stratégique, la position concurrentielle, la loyauté-client ainsi que la performance de l'entreprise (croissance des ventes et rentabilité). Les résultats obtenus supportent le lien entre la stratégie d'orientation-marché et la performance de l'entreprise en contexte coopératif (secteur bancaire) alors que le rôle de médiation de la loyauté relativement aux dimensions stratégiques est démontré. Copyright © 2009 The Authors Journal compilation © CIRIEC 2009.

L’efficience des cooperatives de services financiers: une analyse de la contribution du milieu

March 2011


49 Reads

RÉSUMÉ: Le faible niveau moyen d’efficience des institutions bancaires habituellement trouvé dans les études empiriques a été qualifié de « boîte noire » par Berger et Mester (1997). Cette étude cherche à identifier si les caractéristiques de l’environnement de même que celles qui sont propres à une coopérative d’épargne et de crédit pourraient expliquer une partie des écarts de performance apparaissant dans les scores d’efficience. Le modèle de coût que nous avons estimé est basé sur la valeur ajoutée par l’intermédiation financière. Par ailleurs, pour éviter la perte d’informations découlant de la borne à l’unité des scores d’efficience découlant du DEA, nous avons comparé les résultats d’une analyse avec le score d’efficience et de superefficience. Nos résultats montrent qu’au moins 34% des écarts de scores peuvent être expliqués par un ensemble limité de variables: taille de la coopérative, taux de capitalisation, épargne par membre, nombre de membres et type de marché.

Organizational Culture, Individual Differences and the Participation System in Cooperativism of Associated Workers in Andalusia, Spain

February 2003


48 Reads

From a psychosocial perspective, we have attempted to identify the characteristics of the democratic systems of a sample of 36 Andalusian cooperatives of associated workers. In this study it has become evident that those who participate the least in the governments of their organizations are the workers and those with less education. Thus, there is a high degree of association between participation in the governing of the cooperative and the development within it of an appropriate organizational culture. The results of this study have allowed us to empirically deconstruct the concept of cooperative democracy, and this process may have an effect on the improvement of human resource administration in this type of organization. Copyright CIRIEC, 2003.

Political Economy of Contractual Disputes in Private Water and Sanitation: Lessons from Argentina

February 2011


119 Reads

This paper examines the causes of the contractual disputes in the water and sanitation sectors and the resulting reversal of the privatization process. The evidence has been gathered from four major case studies in Argentina. The discussion is based on the evidence contained in the legal submissions made by the Government of Argentina and the disputing companies to the International Centre for the Settlement of Investment Disputes. The findings of the paper offer important lessons for the design and management of similar contracts for other countries.

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