The Labor Managed Firm: Permanent or Start Subsidies?

Loek Groot and D.E. van der Linde

No 15-04, Working Papers from Utrecht School of Economics

Abstract: Given a range of market failures that persist in the present-day capitalist firm, we explore a novel argument of why the alternative of the labor managed firm is largely absent and argue public intervention should primarily be aimed at the start-up phase of labor managed firms rather than providing permanent tax subsidies. We derive the crucial condition for the emergence of labor managed firms, and show that this condition is unduly restrictive from an efficiency point of view.

Keywords: labor managed firm; profit sharing; ESOP; game theory (search for similar items in EconPapers)
Date: 2015
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Journal Article: The Labor-Managed Firm: Permanent or Start-Up Subsidies? (2017)
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