Productivity, Capital, and Labor in Labor-Managed and Conventional Firms in France

Using two new comparative data sets from France, we present the first study of the compared productivity of labor-managed and conventional firms based on large representative samples of firms in a range of industries including services. We offer new stylized facts on labor-managed firms, and our approach allows us to disentangle incentive effects from those of differences in input demand behavior on factor elasticities. Contrary to received wisdom, labor-managed firms are neither smaller nor always less capital-intensive than conventional firms and grow as fast or faster in all industries. The two groups of firms organize production differently, and labor-managed firms are at least as productive as conventional ones. Labor-managed firms use their inputs efficiently, whereas in several industries conventional firms would produce more with their current input levels if they organized production like labor-managed firms. On average both groups of firms would produce the same output or more using the labor-managed firms' industry-specific technologies than they would using conventional firms'. We do not find labor-managed firms to produce at inefficiently low scale in any industry.