Are cooperative firms a less competitive form of business? Production efficiency and financial viability of cooperative firms with tradable membership shares

Cooperative firms are generally considered a less competitive form of business than conventional capitalist firms in a market system. In this study, we consider cooperative firms that issue tradable membership shares and show that they are in principle as efficient and financially viable as capitalist firms. This implies that, if allowed to issue tradable membership shares, cooperative firms could be a promising alternative to capitalist firms in a wider range of circumstances.