Financial Institutions, the Theory of the Firm and Organisational Form

Kevin Amess ()

The Service Industries Journal, 2002, vol. 22, issue 2, 129-148

Abstract: This article considers the theory of the financial firm, organisational form, and conversion from the mutual to the joint stock organisational form. It draws upon the transaction cost and property rights literature to provide an account of the existence of financial firms. Historically, the mutual emerged in response to asymmetric information. Both the persistence of mutuals and their conversion to the joint stock organisational form are explained with reference to path dependency, which arises from investment in particular assets that 'lock-in' firms to a particular outcome. Conversion is also explained as a necessary process that mutuals go through in an attempt to exploit economies of scope (synergies).

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:taf:servic:v:22:y:2002:i:2:p:129-148

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DOI: 10.1080/714005069

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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