Profit Reinvestment in Italian Worker Cooperatives as a Contribution to a Common Good: An Empirical Analysis on Workers' Perception and Motivation

Abstract

Italian worker cooperatives display a high proportion of profits reinvested into asset locks: there is some literature investigating their function, but little has been said about workers' attitude toward them. In this chapter we therefore investigate what workers' motivations are regarding reinvesting profits into asset locks. We propose to interpret them as a common good and we inquire which factors may increase workers' willingness to contribute to it. We test two arguments that are provided in the literature on collective action: the effect of having a long-time perspective within the cooperative and the effect of displaying “collective” motivations and preferences other than self-regarding. We perform this test by means of a survey among workers of cooperatives affiliated to Legacoop Ravenna in Italy.

We identify a positive effect of both factors, although with some distinction. At a first glance, we find a positive correlation between a longer time horizon and a greater concern for profit reinvestment; when looking closer at the data, we nevertheless see a more complex relationship as two other aspects come into the game: the employment insurance role of worker cooperatives and the “feeling of belonging” that links workers to the firm. The positive effect of this second aspect on the willingness to reinvest into locked assets is strong, although it only appears among worker-members. Moreover, its effect seem to become greater as workers' involvement in decision making increases.

Citation

Navarra, C. (2011), "Profit Reinvestment in Italian Worker Cooperatives as a Contribution to a Common Good: An Empirical Analysis on Workers' Perception and Motivation", DeVaro, J. (Ed.) Advances in the Economic Analysis of Participatory and Labor-Managed Firms (Advances in the Economic Analysis of Participatory & Labor-Managed Firms, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 199-229. https://doi.org/10.1108/S0885-3339(2011)0000012012