Are cooperatives more productive than investor-owned firms? Cross-industry evidence from portugal

Abstract

We analyse empirically whether cooperatives and investor-owned firms differ in terms of productive efficiency. Using rich Portuguese panel data covering a wide range of industries, we apply two different empirical approaches to estimate potential differences in productive efficiency. The results from our benchmark random-effects model show that cooperatives are significantly less productive, on average, than investor-owned firms, both at the aggregate level and for most of the industries considered. However, the results derived from a System-GMM approach, which is our preferred empirical strategy, are much less conclusive, and we cannot conclude that cooperatives are generally less efficient that investor-owned firms. With either approach, though, we find no evidence that cooperatives are more productive than investor-owned firms in any industry.