Democratic firms and economic success. The co-op model

Empresas democráticas y éxito económico. El modelo cooperativo

María José Cabaleiro Casal (), Carlos Iglesias Malvido () and Rocío Martínez Fontaíña ()
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María José Cabaleiro Casal: Universidade de Vigo, España.
Carlos Iglesias Malvido: Universidade de Vigo, España.
Rocío Martínez Fontaíña: Universidade de Vigo, España.

REVESCO: Revista de estudios cooperativos, 2019, issue 132, 29-45

Abstract: This paper analyzes how co-operative principles, particularly democratic management, affect the co-op’s economic objective. The theoretical model specifies the characteristics presented by the production function so democracy generates positive net income. Costs derived from maintaining the one person one vote criterion are explicitly incorporated into this function upon new membership. The results show that democracy contributes to the economic success when the decision-making strategy followed by the partners considers all cooperative principles, especially when a retained earnings policy is regularly applied. This study can be extended to all of Social Economy firms concerned about reinforcing democratic institutions through the business sector. This study can be extended to all of Social Economy firms concerned about reinforcing democratic institutions through the business sector.

Keywords: Co-op principles; Co-op objectives; Economic participation; Democratic management; Decision costs; Economic surplus.; Principios cooperativos; Objetivos cooperativos; Participación Económica; Gestión democrática; Costes de decisión; Excedente cooperativo. (search for similar items in EconPapers)
JEL-codes: D70 J54 M20 P13 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ucm:reveco:y:2019:i:132:p:29-45

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DOI: 10.5209/REVE.65482

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