Research Seminar

Virginie Pérotin: Are more democratic firms more productive?

Date: 6 April
Time: 10:00–12:00

Virginie Pérotin, Professor of Economics at Leeds University Business School

Firms run by their employees are often thought to be more productive than other firms because of the effects of workplace democracy on the quality of decisions and intrinsic motivation and the incentives provided by employee ownership. Labour-managed firms have been found to be more productive than conventional firms in the US and in France.  A series of empirical studies from the 1980s and 1990s generally found that more democratic workers’ cooperatives were more productive than less democratic ones in France, Italy and the UK.  The paper revisits the issue of the effect of cooperative democracy with a large new panel dataset from France, in which information on the occupational and gender composition of the workforce, membership and board of worker cooperatives is available. The measure of democracy used in earlier studies is the percentage of members among the workforce (except for the UK where the presence of worker directors has also been used). One issue that has not been examined until now is whether restricting the extent of democracy for a particular group of members because of prejudice is detrimental to performance. The paper investigates whether gender democracy, in the sense of women’s representation on the board, also affects the firm’s productivity and/or conditions the beneficial effects of a higher membership rate in the workforce of the firm.

Virginie has done comparative empirical research on the effects of firm ownership and governance on performance; public, private and third sector comparisons; employee ownership and profit sharing; worker cooperatives and social enterprises; firm creation and closure; human rights at work.


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