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Being a member of a cooperative bank:ethical or financial decision?

Author

Listed:
  • Damien Egarius

    (LaRGE Research Center, EM Strasbourg Business School, Université de Strasbourg)

  • Patrick Roger

    (LaRGE Research Center, EM Strasbourg Business School, Université de Strasbourg)

Abstract

The definition of co-operative banks given by the International Cooperative Banking Association (ICBA) states that co-operative members, who buy and hold member shares, believe in the ethical values of honesty, openness, social responsibility and altruism. Using a unique database of 246,120 clients/members at a cooperative bank, we show that the trading volume of member shares is far from insignificant. The analysis of clients’ portfolios over a 13-month period shows that clients use member shares as standard savings and investment vehicles. These results show that the reasons given by the ICBA to become a member of a cooperative bank are unimportant in the decision process.

Suggested Citation

  • Damien Egarius & Patrick Roger, 2016. "Being a member of a cooperative bank:ethical or financial decision?," Revue Finance Contrôle Stratégie, revues.org, vol. 19(4), pages 27-51., June.
    • Handle: RePEc:dij:revfcs:v:19:y:2016:i:4:p:27-51.
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    More about this item

    Keywords

    cooperative banks; bank membership; capital requirements; investor behavior.;
    All these keywords.

    JEL classification:

    • 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
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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