Empirical Research On Cooperative Banks Governance Model And Cooperative Banks' Performance

Cooperative banks have a long history and play an active role in economic development. Because of its unique system of property rights, It has been the focus of academic debate, more and more people begin to pay attention to its governance. From the unique feature of cooperative and stock banks, this thesis constructs a general theoretical framework of cooperative bank governance and studies its influences on banks'performance. Based on a sample of 7860 observed values from 2005 to 2008 in 1965 banks of 22 countries in OECD, this thesis analyzes influences of cooperative bank governance. First, according to its specialty, three different performance indexes are set and they are financial performance indexes represented by ROA, risk adjustment indexes represented by Z_score and efficiency indexes of cooperative bank tested by DEA. Second, in view of the companies'governance structure, source of law and cooperative organization, sample countries in this study are divided into the unitary governance mode and multi-governance one. Third, the governance indexes gained by using the approaches of Kaufmann, Kraay and Mastruzzi are adopted in the present study to analyze its influences on companies' performances in different modes.The whole thesis is divided into six chapters. Chapter One is the introductory section, including the backgrounds, the significance, research design, the organization as well as the innovations and limitations of the study. Chapter Two is a brief review of previous literature. It reviews the literature in aspects from company governance theory, bank governance to cooperative bank governance. Chapter Three analyzes the theories of cooperative bank governance. It starts with the unique characteristics of cooperative banks, and discusses the general framework of cooperative governance theory. Chapter Four studies the typical governance modes of cooperative banks adopted in the world. It highlights the differences of two governance modes by studying the cases of Rabobank and the Canada Desjardins cooperative bank. Chapter Five presents an empirical study. Based on theoretical analyses, the present study set three performance indexes, and analyzed the influence of the modes on the banks' performances. The governance indexes gained by using the approaches of Kaufmann, Kraay and Mastruzzi were adopted in the present study. It analyzed the influence of the different governance quality on the performance of cooperative banks in different governance modes. Chapter Six is a conclusion. It describes in detail the findings of the present study gained by using the above theory and the empirical study.The major findings are as follows:I. Different modes have different influences on performance indexes tested by different methods. Under the financial performance index ROA, risk adjustment performance index, the unitary mode has a significant and positive influence on performance indexes, but under performance index tested by DEA, the multi-mode has a positive influence.II. In different modes, the influences that governance index has on different performances are different. When performance levels are examined by return on assets, governance levels have a significant and positive influence on performance levels. However, when performance levels are examined by risk adjustment performance index, governance levels have a negative influence on performance levels.III. In different modes, the influence of the constituent governance indexes on the performance differs from one mode to another and demonstrates patterns of the mode. There are no big discrepancies of the cooperative governance modes when examined by the efficiency index; whereas under the influences of profit-related indexes, there are distinct discrepancies of the influences of constituent indexes.IV. There are two theories, i.e. homogeneity theory and heterogeneity theory regarding the mode of company governance. However, the findings of the present study show that as far as the industry of cooperative banks is concerned, there is a higher degree of heterogeneity in the governance modes.