The dynamics of firm growth and failure under alternative forms of ownership
This thesis extends the literature on the dynamics of firm growth and failure by testing the robustness of past findings for capitalist firms to alternative ownership structures. While the theoretical results are altered by the internal organisation of the firm, the empirical findings are unchanged. This suggests that the theoretical models place excessive emphasis on the organisational structure and inadequate emphasis on more basic and fundamental factors affecting firm growth. The thesis applies the learning models of growth to the case of the Illyrian labour managed firm, where members maximise profits per worker. The critical efficiency-size relationship is indeterminate under labour management. Thus, the majority of the clear cut empirical predictions of the model for profit maximisation no longer hold. Three possible explanations for the breakdown of the results are examined. One explanation is that the Illyrian model is overly simplistic and does not accurately reflect the actual behaviour of cooperatives. This is rejected using an institutional structure model of the French producer cooperative which yields predictions which are remarkably similar to those of the Illyrian model. The second explanation considered is that the growth and survival of cooperatives in fact substantially differs from capitalist firms. This explanation is rejected in the empirical section which tests the actual growth and survival relationships using a dataset of French producer cooperatives. The estimated survival-size relation is convexly positive and the growth-size relation convexly negative, exactly as they have been found previously for conventional firms. The final remaining explanation is that the theoretical models are structured so as to overemphasize the internal structure of the firm to the neglect of more generic factors affecting growth and survival. This is accepted in a final section which proposes new directions for theoretical research on the growth and survival of all firms.