Businesses owned and managed by their employees (worker cooperatives) in France

What is it about?

France is the third country in Europe after Italy and Spain for the number of employee-owned firms, with some 2,600 worker cooperatives (SCOPs). We propose a comprehensive review of SCOPs and the extent to which they face barriers to expansion. We analyze legislation regulating employee ownership; review the rich empirical economic literature on SCOPs from the last few decades; and offer new, unpublished empirical evidence. SCOPs have been well anchored in France for well over a century. They benefit from a consistent legal framework and a well-structured and supportive cooperative movement in the form of a national confederation (CG Scop). Cooperative laws provide possibilities for attracting external capital, incentives for new workers to become members, equality of voting rights between worker members and a distribution of profits that favours investment and labour. France has extensive data on cooperatives, so we are able to show in detail SCOPs’ distribution across a wide range of industries, regions and sizes. Empirical studies from the 1980s until 2022 demonstrate that SCOPs are more productive than conventional firms; their social performance is good; they are not under-capitalized; invest more and survive better than other firms. A majority are created from scratch but a significant proportion come from converted conventional firms. Yet the number of SCOPs remains modest in comparison with Italy or Spain. A lack of information about worker cooperatives among potential entrepreneurs and the agencies advising them may explain part of the comparatively limited expansion of the movement until now.

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Why is it important?

This is the first comprehensive review of employee-owned companies in France in several decades. With some of the best statistical data in the world on worker cooperatives and other companies, our own and previous studies show that in businesses owned and run by their employees in France can be found in most industries; are larger than other companies and have as much capital in all industries; and are more productive, in particular in knowledge-intensive industries. We also present in some detail the ways in which worker cooperatives are organized and supported by legislation in France; and rarely become capitalist companies. The paper can be helpful to design cooperative laws and policies to promote democratic enterprises, for example in high-tech, knowledge-intensive sectors.

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