Pricing and Dividend Policies in Open Credit Cooperatives
AbstractThis paper develops a model of pricing and dividend policies in open credit cooperatives (i.e., those doing member and nonmember business). For a fixed distribution of member preferences, the larger the fraction of business done by members, the smaller the optimal dividend and the larger the optimal pricing subsidy. For a fixed fraction of member business, the greater the skewness of member preferences toward loan (deposit)business with the credit cooperative, the larger the optimal dividend and the higher (lower) the optimal loan (deposit) interest rate. Aggregate empirical evidence from the German cooperative banking sector supports a version of the latter prediction.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 158 (2002)
Issue (Month): 2 (June)
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Other versions of this item:
- William R. Emmons & Frank A. Schmid, 2000. "Pricing and dividend policies in open credit cooperatives," Working Papers 2000-008, Federal Reserve Bank of St. Louis.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
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