On the Choice Between Capitalist and Labour-Managed Production: Evidence from a Panel of Entrants into UK Manufacturing Industries

Empirical evidence suggests that labour-managed firms (LMFs) are relatively rare in market economies not because they are unable to survive as long as their capitalist firm (CF) counterparts, but rather because they are created much less frequently. In this chapter we use event count models applied to panel data on UK manufacturing to provide a direct comparison of the entry process of CFs and LMFs. Our main finding is that risk and capital requirements constitute greater entry barriers for LMFs than for CFs.