Mutuals and co-operatives have a distinct legal form which sets them apart from commercial companies. This chapter reviews the theoretical and empirical literature on the governance and performance effects of these differences, showing that it may be misleading to think of workers and customers as the owners of mutual enterprises, and that a more precise focus on the content of voice, income, and control rights in particular organizations is needed in order to assess the implications of different legal structures for economic performance. Empirical evidence suggests that, on average, worker and customer mutuals are more risk-averse and less profitable, but more sustainable, than commercial entities structured as companies limited by share capital. However, the mutual form does not guarantee that the firm is run in a more democratic and participative way. Mutualization, therefore, while useful in some contexts, should not be explored at the cost of wider corporate governance reforms.
Is the Corporate Loan Market Globally Integrated? A Pricing Puzzle
