Cooperative firms in hard times

Simona Monteleone () and Francesco Reito ()
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Simona Monteleone: University of Catania
Francesco Reito: University of Catania

Small Business Economics, 2018, vol. 51, issue 1, No 8, 179 pages

Abstract: Abstract This paper develops a simple principal-agent model to determine the occupational choice of some individuals between entering the labor market as workers and setting up a labor-managed firm. The start-up requires external credit, which is provided by a monopolistic lender. We show that the occupational choice depends on both the reservation utility of workers and the loan profitability of the bank.

Keywords: Labor-managed firms; Asymmetric information; Occupational choice; D82; L22 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11187-017-9929-8

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