The accumulation of capital in labour managed firms has been widely studied so far in the specialised literature. Analytical results do seem to clearly highlight a tendency to under-investment in this kind of production organisation. However, institutional aspects have not been thoroughly studied, and a more comprehensive and coherent elaboration may
help finding good institutional solutions able to solve the problems highlighted in the first instance by Furubotn, Pejovich and Vanek. The present study just elaborates on the institutional background underpinning the problem of under-investment. Special relevance will be given to the role of property rights, the presence of equity in LMFs,
individual appropriation of the net residual calculated at the end of the accounting period, and loan finance by worker members of LMFs.