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- Title
Are Workers' Enterprises Entry Policies Conventional?
- Authors
Moretto, Michele; Rossini, Gianpaolo
- Abstract
One of the reasons why workers' enterprises (WE) still represent a relevant chunk of the economy may lay in some affinities with conventional profit-maximizing firms. To provide a solid basis to this presumption, we compare the entry policies of WEs and conventional firms when size is set at entry and kept fixed afterwards. Even though short-run differences remain between WEs and conventional firms, a long-run coincidence appears in an uncertain dynamic environment. Endogenizing size and time of entry we see that the two kinds of firms enter at the same trigger market price and size. Both of them enter earlier and choose a dimension larger than the minimum efficient scale. This generalized coincidence may be another way to explain why WEs still make for an important share of the economy despite the ongoing mantra of their imminent demise.
- Subjects
MARKET entry; INDUSTRIAL management; LABOR unions; EMPLOYEE participation in management; PROFIT maximization; LABOR economics
- Publication
LABOUR: Review of Labour Economics & Industrial Relations, 2008, Vol 22, Issue 2, p369
- ISSN
1121-7081
- Publication type
Article
- DOI
10.1111/j.1467-9914.2007.00405.x