| An enduring issue in the study of firm behavior is the relationship between performance and ownership structure. One area that has received little attention---the focus of this study---is the relationship between employee (or worker) ownership and behavior affecting the environment. In contrast to the usual assumption of profit maximization, firms owned and managed by their employees might take into account variables other than the income of the owners, such as pollution. Using a multiparty model of firm behavior and including pollution as an object of concern, this study fords, depending on the bargaining power of the workers relative to the shareholders' bargaining power and the weight labor places on emissions relative to wages and employment, that firm's shadow price of emissions will vary with ownership type. This prediction is tested using data on the Pacific Northwest's plywood and veneer manufacturing industry from 1978 through 1986. A linear programming technique, using a variation of the generalized Leontief output distance function is used to estimate the shadow value of emissions across ownership structures---labor-managed mills, union mills, and profit-maximizing mills. The results show the three types of firms have different shadow prices for total suspended particulates and the same price for volatile organic compounds. Moreover, these estimates suggest that mills producing just plywood emit significantly less total suspended particulates and volatile organic compounds than mills producing veneer; and show labor-managed mills to be more efficient than either union mills or classic mills. |
