The Economics of Organization Structure Changes: a US perspective on demutualization

Chaddad, Fabio Ribas; Cook, Michael

doi:10.1111/j.1467-8292.2004.00263.x

Cited by 56 publications

(52 citation statements)

References 28 publications

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“…At the same time, several studies suggest that cooperative banks have generally lower incentives to take on risks. For example, Hansmann (1996) and Chaddad and Cook (2004) find, for data from the United States, that mutual financial institutions tend to adopt less risky strategies than demutualized ones.…”

Section: Motivation and Literature Overviewmentioning

confidence: 99%

Cooperative Banks and Financial Stability

Čihák

Hesse²

2007

IMF Working Papers

122

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Cooperative banks are an important, and growing, part of many financial systems. The paper analyzes empirically the role of cooperative banks in financial stability. Contrary to some suggestions in the literature, we find that cooperative banks are more stable than commercial banks. This finding is due to much lower volatility of the cooperative banks' returns, which more than offsets their lower profitability and capitalization. We argue that this lower variability of returns is most likely due to cooperative banks' ability to use customer surplus as a cushion in weaker periods. We also find that in systems with a high presence of cooperative banks, commercial banks are less stable than they would be otherwise. JEL Classification Numbers: G21, P13

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Section: Motivation and Literature Overviewmentioning

confidence: 99%

Cooperative Banks and Financial Stability

Čihák

Hesse²

2007

IMF Working Papers

122

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“…A problem of definition Before addressing these issues is important to provide a definition of demutualization, because it has been defined in at least three different ways. The first one that dates back to nineties and has been clearly restated by Cook in 2004 and2007: it is a change in the ownership structure of user owned and controlled organizations from a mutual to a for-profit, proprietary organization. As a result of demutualization, residual claim and control rights are reassigned among stakeholders with implications to firm behaviour and performance.…”

Section: Why Demutualization Was a Worldwide Process?mentioning

confidence: 99%

“…One of the main feature of these new organizational structures is their attempt to take some advantages of the investor oriented firms (above all in capital raising activities) while retaining the mutual/cooperative status. According to some economists they can be considered an hybrid, the publicly listed cooperative (Nilsson 2001, Chaddad andCook 2004;Bekkum, O.F. van and J. Bijman, 2006).…”

Section: Introductionmentioning

confidence: 99%

Demutualization and Its Problems

Battilani

Schröter²

2012

The Cooperative Business Movement, 1950 to the Present

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Over the last three decades cooperatives experienced acceleration of institutional innovation with the introduction of many variations to the reference model. It is certainly not surprising that coops changed their organizational structure over time to face the challenges of world. In the United States and in Canada they are commonly referred to as New generation cooperatives, in Italy and Spain as cooperative groups or network of cooperatives. One of the main feature of these new organizational structures is their attempt to take some advantages of the investor oriented firms (above all in capital raising activities) while retaining the mutual/cooperative status. Many of these changes have been undertaken to facilitate the growth of the enterprises both in domestic market and abroad. Due to the wideness of the phenomenon we could name the last three decades the age of hybridization. However in some cases the search for new structures went further and assumed the aspect of conversion of mutuals into stock firms. Our paper will deal with this latter part of the story, focusing on cooperatives that preferred conversion or demutualization to hybridization. The paper describes the chronology and the geography of demutualization and analyses the forces that drove it over the last decades. The main conclusion is that demutualization provided solutions for real problems, as hybridization did, however the choice between these two options seems to have been more a matter of ideology than of efficiency.

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“…The process is variously defined (see e.g. [Chaddad, Cook 2004;Elliot 2002]). Generally, one may say that demutualization is the process of converting (financial) institutions from non-profit, member-owned organizations to for-profit, shareholder-owned corporate entities, or, to put it in another way, the process by which mutual organization or co-operative changes legal form to a joint stock company.…”

Section: Demutualizationmentioning

confidence: 99%

Selected processes influencing contemporary banking systems

Marszałek¹

2015

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu

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The Economics of Organization Structure Changes: a US perspective on demutualization

Cited by 56 publications

References 28 publications

Cooperative Banks and Financial Stability

Cooperative Banks and Financial Stability

Demutualization and Its Problems

Selected processes influencing contemporary banking systems

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