THE EFFICIENCY OF THE NETWORK ORGANIZATIONAL STRUCTURE OF COOPERATIVE BANKS

Andrea Viola ()
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Andrea Viola: School of Banking, Finance, and Insurance, Università Cattolica del Sacro Cuore, Italy

Journal of Financial Management, Markets and Institutions (JFMMI), 2024, vol. 12, issue 01, 1-26

Abstract: The paper proposes an empirical investigation of scale economies, scope economies, and market power of the network organizational structure of Italian cooperative banks. For 452 cooperative banks (and a control group of 223 commercial banks) over 2006–2018, empirical findings show that cooperative banks experienced cost economies of scale and scope, but they experienced scale diseconomies and constant scope economies on the revenue side. Unlike commercial banks, cooperative banks did not seem to benefit on the earnings side from increases in scale and diversification. Moreover, cooperative banks experience greater market power than commercial banks. Traditional advantages, in terms of network economies and relationship lending, are proven empirically to persist for the network organizational structure.

Keywords: Cooperative banks; banking efficiency; organizational structure (search for similar items in EconPapers)
JEL-codes: G21 L25 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2282717X23500068

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