Rescuing firms in a cooperative way: worker buyouts in Italy

We have carried out an empirical study of WBOs in Italy since 1985, describing the role of two key institutions - the legal framework and the cooperative associations. WBO operations were officially recognized in 1985 by the Italian policy-maker. The research has led to establishing a sample, wider than any previously done in Italy, resulting from the analysis of data collected by the Legacoop’s Area Studi and provided by the main actors in the promotion and financing of WBOs (Cooperazione Finanza Impresa, COOPFOND, Federazione Trentina della Cooperazione) and the data published by Banca Etica and the Italian Network of Recovered Companies. This has led to being able to closely study the effectiveness and features of WBOs in Italy. We found that longer lifespans and higher rates of activity are associated with the membership of a cooperative association. The sectoral and geographic analysis confirms the conclusions of previous studies, highlighting a clear concentration of WBOs in the Central and North-Eastern regions of Italy and in the manufacturing sector. The average lifespan of the co-operatives, as well as the survival rate, proves the positive economic and social impact of WBOs in times of crisis. The findings have implications that go beyond Italy. We conclude discussing the importance of an appropriate legal framework supporting WBOs and the importance of cooperative associations, including their financial branches.