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Analysis of the economic differences between capitalist and labour‐owned enterprises

Analysis of the economic differences between capitalist and labour‐owned enterprises Purpose – In recent years, an increasing interest in the participative practices of the workpeople in their companies has taken place in the European Union. Taking advantage of this situation, the purpose of this paper is to show additional evidence of the benefits from companies with majority worker's capital participation as opposed to firms that do not follow this approach. Bearing in mind, also, that Spain is the only European country with the juridical form of financial majority participation of the workpeople, in order to recommend it in the European context according to the reached results. Design/methodology/approach – To study whether or not there are differences in the two types of companies, a logistic regression model is used. Findings – In this study, results indicate that business profitability (return on assets), productivity and equity capital coefficient are not significant variables for the purpose of determining the distinguishing features of labour‐owned firm (LOF) as against capitalist firm. The only variable of those originally included which has turned out to be significant is the financial profitability (return on equity). Practical implications – Initial proposal: specific European law governing investment capital of employees. Originality/value – The study will be useful to show the characteristics of Spanish LOFs (operating under their own legal structure) and their benefits. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Social Economics Emerald Publishing

Analysis of the economic differences between capitalist and labour‐owned enterprises

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Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
0306-8293
DOI
10.1108/03068290910956912
Publisher site
See Article on Publisher Site

Abstract

Purpose – In recent years, an increasing interest in the participative practices of the workpeople in their companies has taken place in the European Union. Taking advantage of this situation, the purpose of this paper is to show additional evidence of the benefits from companies with majority worker's capital participation as opposed to firms that do not follow this approach. Bearing in mind, also, that Spain is the only European country with the juridical form of financial majority participation of the workpeople, in order to recommend it in the European context according to the reached results. Design/methodology/approach – To study whether or not there are differences in the two types of companies, a logistic regression model is used. Findings – In this study, results indicate that business profitability (return on assets), productivity and equity capital coefficient are not significant variables for the purpose of determining the distinguishing features of labour‐owned firm (LOF) as against capitalist firm. The only variable of those originally included which has turned out to be significant is the financial profitability (return on equity). Practical implications – Initial proposal: specific European law governing investment capital of employees. Originality/value – The study will be useful to show the characteristics of Spanish LOFs (operating under their own legal structure) and their benefits.

Journal

International Journal of Social EconomicsEmerald Publishing

Published: May 8, 2009

Keywords: Return on capital employed; Spain; Business enterprise; Business analysis; Employees

References