The governance structures of Japanese credit associations and their objective functions

Abstract

Although Japanese credit associations are nonprofit cooperative financial institutions, they shoulder the same financial functions as regional banks that are stock companies and they could compete with each other in a regional market. On the other hand, governance structures of credit associations tend to make disciplines be weaker than those of regional banks and their performances might be better than regional banks for these reasons.In the present paper, we empirically investigated whether the objective functions of credit associations are different from those of regional banks with considering the differences of their governance structures. As a result, although significant differences of profitability of these two types of institutions were not detected, it was also demonstrated that credit associations can capture more share of deposits than regional banks and the former are more conservative in risk taking than the latter. From these, there is a possibility that Japanese credit associations have different objective functions from regional banks.

Spatial dependence in small cooperative bank risk behavior and its effects on bank competitiveness and SMEs

“…See https://lab24.ilsole24ore.com/qualita-della-vita/. 12 In principle, SYS-GMM is usually preferred over the standard GMM estimator 71 because it performs better in cases where the variables are highly persistent over time and for possible simultaneity bias (on this point, see Blundell and Bond 69,72 ). 13 The TSD equation also includes the spatial-temporal lagged variable, that is 𝜚 ∑ j≠i w ij ⋅ Z Score j,t−1 .…”

“…In this regard, the SYS-GMM models are estimated with Windmeijer 70 finite sample correction and with forward orthogonal deviation (FOD) transformation. 12 All of the explanatory variables are lagged.…”

“…10 Comparable non-profit financial institution around the world are, for instance, the credit union, widespread in the Anglo-Saxon countries (see, Lessambo 11 ) and the Japanese shinkin banks. 12 Moreover, there is an important heterogeneous banking morphology for BCCs in Italy: the northeast, especially Trentino-Alto Adige, is rich with cooperative banks, but they are sparse in the rest of the country. Similarly, the macroeconomic conditions under which BCCs operate differs across geographical regions of the country, with Italy comprising 20 regions and 110 provinces that are generally conditioned by their different levels of economic performance (with the northern regions typically more developed and the southern regions typically less developed).…”