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Network vs integrated organizational structure of cooperative banks: Evidence on the Italian reform

Elena Beccalli, Ludovico Rossi and Andrea Viola

International Review of Financial Analysis, 2023, vol. 89, issue C

Abstract: We empirically investigate the impact of the regulatory change from a network organizational structure to an integrated one on scale economies, scope economies, and market power in cooperative banks. We exploit the passage of the Italian cooperative bank reform in 2016. Using a difference-in-differences identification strategy, we examine a treated group of 424 cooperative banks and a matched control group of 192 commercial banks over the period 2009–2019. Our findings indicate that cost scale and scope economies of cooperative banks are positively affected by the reform, while their profit scale and scope economies are not affected. Lastly, the Lerner Index is positively affected by the reform. Overall, the reform enhances cooperative banks' ability to exploit advantages related to a larger size and diversification.

Keywords: Cooperative banks; Banking efficiency; Organizational structure; Regulatory reform (search for similar items in EconPapers)
JEL-codes: G21 G28 L25 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:89:y:2023:i:c:s1057521923003289

DOI: 10.1016/j.irfa.2023.102812

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