Do cooperative enterprises create social trust?

Sabatini, Fabio and Modena, Francesca and Tortia, Ermanno (2012): Do cooperative enterprises create social trust?

Abstract

This paper contributes to the literature by carrying out the first empirical investigation into the role of different types of enterprises in the creation of social trust. Drawing on a unique dataset collected through the administration of a questionnaire to a representative sample of the population of the Italian Province of Trento in March 2011, we find that cooperatives are the only type of enterprise where the work environment fosters the social trust of workers.

• Item Type: MPRA Paper
• Language: English
• Keywords: cooperative enterprises; nonprofit organizations; trust; social capital; intrinsic motivations; inclusive governance; work organization
• Subjects: P - Economic Systems > P1 - Capitalist Systems > P13 - Cooperative Enterprises; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L31 - Nonprofit Institutions ; NGOs ; Social Entrepreneurship; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out

References

Alchian, A. A., Demsetz, H. (1972). “Production, Information Costs, and Economic Organization.” American Economic Review LXII, no. 5 (December): 777-795.

Antoci, A., Sodini, M., Sabatini, F. (2011). Economic Growth, Technical Progress, and Social Capital: the Inverted U Hypothesis. MPRA Paper No. 30326.

Antoci, A., Sabatini, F., Sodini, M. (2012). The Solaria Syndrome: Social Capital in a Hypertechnological Growing Economy. Journal of Economic Behavior and Organization 81 (3), 802-814.

Arrow, K. (1972). Gifts and Exchanges. Philosophy and Public Affairs 1(4), 343–362.

Bartlett, W., Cable, J., Estrin, S., Jones, D. C., Smith, S. C. (1992). Labor-Managed Cooperatives and Private Firms in North Central Italy: an Empirical Comparison. Industrial and Labor Relations Review, 46, 103-18.

Becchetti, L., Castriota, S., and Tortia, E.C. (2012). Productivity, wages, and intrinsic motivations. Small Business Economics, DOI 10.1007/s11187-012-9431-2.

Ben-Ner, A., Jones, D.C. 1995. Employee participation, ownership, and productivity: A theoretical framework, Industrial Relations, vol. 34, no. 4, 532-54.

Ben-Ner, A., Ren, T., Flint Paulson, D. (2011). A Sectoral Comparison of Wage Levels and Wage Inequality in HumanServices Industries. Nonprofit and Voluntary Sector Quarterly, 40 (4), 608-633.

Birchall, J. 2010. People-centred businesses: co-operatives, mutuals and the idea of membership. Basingstoke: Palgrave Macmillan.

Bonin, J. P., Jones, D. C., Putterman, L. (1993). Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet? Journal of Economic Literature, XXXI (September), 1290-320.

Borzaga, C., Tortia, E. (2006). Worker motivations, job satisfaction, and loyalty in public and non-profit social services. Non-profit and Voluntary Sector Quarterly, 35(2): 225-48.

Borzaga, C., Tortia, E. C. (2010), The Economics of Social Enterprises. An Interpretive Framework, in: L. Becchetti and C. Borzaga (Eds), The Economics of Social Responsibility. The World of Social Enterprises. London, U.K.: Routledge: 15-33.

Burdìn, G. (2012). Does workers’ control affect firm survival? Evidence from Uruguay. University of Siena, Department of Economics and Statistics, Working Paper N. 641.

Burdìn, G., Dean, A. (2009). New evidence on wages and employment in worker cooperatives compared with capitalist firms. Journal of Comparative Economics, 37, 517–533.

Carpenter, J., Daniere, A. G., Takahashi, L. M. (2004). Cooperation, Trust, and Social Capital in Southeast Asian Urban Slums. Journal of Economic Behavior & Organization, 55, 533-551.

Craig, B. & Pencavel, J. (1992) The Behaviour of Worker Cooperatives: the Plywood Companies of Pacific Northwest. The American Economic Review, 82, 1083-105.

Craig, B. & Pencavel, J. (1994) The Empirical Performance of Orthodox Models of the Firm: Conventional Firms and Worker Cooperatives. Journal of Political Economy, 102, 718-44.

Degli Antoni G. (2009). Intrinsic vs. Extrinsic Motivations to Volunteer and Social Capital Formation, Kyklos 62(3), pp.359-370.

Degli Antoni G., Portale E. (2011). The effect of corporate social responsibility on social capital creation: an empirical study on participation in social cooperatives, Nonprofit and Voluntary Sector Quarterly, 40, 566-582.

Dow, G. K. (2003) Governing the Firm: workers’ control in theory and practice, Cambridge: Cambridge University Press.

Erdal, D. (2011). Beyond the corporation. Humanity working, London: The Bodley Head.

Erdal, D. (2012). Employee ownership and health. Paper presented at the workshop: Cooperatives and Public Health. Edinburgh: Scottish Enterprise, 08th May.

Fehr, E. (2009). On the Economics and Biology of Trust. Journal of the European Economic Association, 7(2-3), 235-266.

Fine, B. (2010). Theories of Social Capital: Researchers Behaving Badly. Pluto.

Freundlich, F., Gago, M. (2012). Cooperative employment density, social capital and public health: Evidence from Gipuzkoa Province, the Basque Country. Paper presented at the workshop: Cooperatives and Public Health. Edinburgh: Scottish Enterprise, 08th May.

Frey, B., Jegen, R. (2001). Motivation Crowding Theory. Journal of Economic Surveys, 15(5), 589-611.

Fukuyama, F. (1995). Trust: The Social Virtues and the Creation of Prosperity. New York: Free Press.

Guiso, L., Sapienza, P., Zingales, L. (2008). Trusting the Stock Market. Journal of Finance, 63(6), 2557-2600.

Guiso, L., Sapienza, P., Zingales, L. (2009). Cultural Biases in Economic Exchange? Quarterly Journal of Economics, 124 (3), 1095-1131.

Hansmann, H. (1996) The Ownership of the Enterprise. Harvard, MA: Harvard Univ. Press. Istat (2010). Esportazioni dei sistemi locali del lavoro. Roma: Istat.

Jensen, M. C., Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, October, 1976, V. 3, No. 4, pp. 305-360.

Kawachi, I., Kennedy, B. P., Lochner, K., Prothrow-Stith, D. (1997). Social capital, income inequality, and mortality. American Journal of Public Health 87 (9), 1491-1498.

Knack, S. (2002). Trust, Associational Life and Economic Performance. In Heliweel, J. (Ed). The Contribution of Human and Social Capital to Sustained Economic Growth and Well-Being: International Symposium Report. Quebec: Human Resources Development Canada. 2001.

Knack, S., Keefer, P. (1997). Does Social Capital Have An Economic Payoff? A Cross Country Investigation. Quarterly Journal of Economics 112 (4), 1251-1288.

Lind, A. E., Tyler, T. R. (1988). The Social Psychology of Procedural Justice. New York: Plenum.

Marchegiani, L., Reggiani, T., Rizzolli, M. (2011). How Unjust! An Experimental Investigation of Supervisors’ Evaluation Errors and Agents’ Incentives. IZA Discussion Paper No. 6254.

Mas, A., Moretti, E. (2009). Peers at work. The American Economic Review, 99:1, 112–145.

Meulman, J. J., Van der Kooij, A.J., & Heiser, W.J. (2004). Principal Component Analysis with nonlinear optimal scaling transformations for ordinal and nominal data. In D. Kaplan (Ed.), The Sage handbook of quantitative methodology for the social sciences. London: Sage.

Mill, J. S. (1848). Principles of Political Economy. London: Longmans, Green and Co.

Miyazaki, H. and Neary H. 1983. The Illyrian firm revisited, The Bell Journal of Economics, vol. 14, no. 1, 259-270.

Mohnen, A., Pokorny, K., Sliwka, D. (2008). Transparency, Inequity Aversion, and the Dynamics of Peer Pressure in Teams: Theory and Evidence. Journal of Labor Economics, 26 (4), 693-720.

North, D. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.

Olson, M. (1963). Rapid Growth as a Destabilizing Force. Journal of Economic History 23(4), 529-552.

Olson, M. (1982). The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven: Yale University Press.

Pearl, J. 2012. The causal foundations of Structural Equation Modeling. University of California, Los Angeles Computer Science Department, Technical report R-370, October. Retrieved, May, 15th, 2012: http://ftp.cs.ucla.edu/pub/stat_ser/r370.pdf

Perotin, V. (2012). Good, sustainable jobs in the community. Paper presented at the conference: Cooperatives for a better world. Venice, San Servolo: EuRICSE (European Research Institute on Cooperative and Social Enterprises): 15-16 March.

Podsakoff, P. M., Podsakoff, N. P., MacKenzie, S. B. (2003). Common Method Biases in Behavioral Research: A Critical Review of the Literature and Recommended Remedies. Journal of Applied Psychology, 88 (5): 879–903.

Putnam R. D., (1993). Making democracy work: Civic traditions in modern Italy. Princeton: Princeton University Press.

Sabatini F. (2008). Social Capital and the Quality of Economic Development. Kyklos, 61 (3), 466-

Sacconi L., Degli Antoni G. (2009), A theoretical analysis of the relationship between social capital and corporate social responsibility: concepts and definitions, in

Sacchetti S. and Sugden R. (eds), Knowledge in the Development of Economies. Institutional Choices under Globalisation, Edward Elgar.

Smith, A. (1759). Theory of Moral Sentiments. London: A. Millar.

Stiglitz, J. (2009). Moving beyond market fundamentalism to a more balanced economy. Annals of Public and Cooperative Economics, 80 (3), 345-360.

Stikkers, Kenneth W. (2009). Dewey, economic democracy, and the Mondragon cooperatives. European Journal of Pragmatism and American Philosophy, 3(2): 186-199.

Thibaut, J. W., Walker, L. (1975). Procedural justice: A psychological analysis. Hillsdale, N.J. and New York: Erlbaum Associates.

Tortia, E.C. (2008). Worker Well-Being and Perceived Fairness: Survey-Based Findings from Italy, Journal of Socio-Economics, 37 (5), pp. 2080-2094.

Uphoff, N. (1999). Understanding Social Capital: Learning from the Analysis and Experience of Participation. In Dasgupta, P. & Serageldin, I. (Eds.), Social Capital: A Multifaceted Perspective. Washington, D.C.: The World Bank.

Valentinov, V. (2007). Why are cooperatives important in agriculture? An organizational economics perspective. Journal of Institutional Economics, 3: 55-69.

Wright, S. (1934). The method of path coefficients. Annals of Mathematical Statistics, 5, 161-215.

Yamamura, E. (2011). The role of social trust in reducing long-term truancy and forming human capital in Japan. Economics of Education Review, 30(2), 380-389.

Yamamura, E. (2012). Groups and information disclosure: evidence on the Olson and Putnam hypotheses in Japan. International Journal of Social Economics, 39(6), 423-439.