Researches on Economic Models of Non-Investor-Owned Firms Focused on Cooperatives

<p>In Japan, there have not been many arguments based on theoretical economic models regarding non-investor-owned firms such as cooperatives. And theoretical elucidation of such organizations has been sought for a long time. Modern economic theory of cooperatives began with Ward（1958） and its main focus has been on labor managed firms （LMF） and labor cooperatives which are owned by agents providing labor inputs to those institutions.</p><p>Recent developments in this research field have shown that there are economic environments in which non-investor-owned organizations, such as cooperatives, partnerships, non-profit firms, mutually owned firms, and government institutions, could be more efficient compared to investor-owned firms, or such organizations might accomplish specific roles which traditional investor-owned firms cannot fulfill in the market. These works share some common characteristics that many of them were inspired by Hansmann （1996） and applied some theories of organizational economics including property rights theory with incomplete contracts which were developed by Grossman and Hart（1986） and Hart and Moore（1990）.</p><p>The current work provides an overview of important theoretical models of LMF as well as non-investor-owned firms in organizational economics, with special attention on those modeling user owned firms such as Hart and Moore （1996, 1998） and Bubb and Kaufman （2013）. We analyze the assumptions adopted in these models and explain how the conclusions are derived from these assumptions. Finally we consider what kind of implications these models of user owned firms might have for cooperatives and mutually owned firms in Japan.</p>