Joint-stock System or Share Cooperative System? A Comparative Study on the Performance of Different Rural Financial Insti
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| Title | Joint-stock System or Share Cooperative System? A Comparative Study on the Performance of Different Rural Financial Insti
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| Author | Li Guangzi and Gang Zeng |
| Organization | Institute of Finance and Banking, CASS |
| Email | liguangzi@sina.com |
| Key Words | Joint-stock System; Share Cooperative System; Rural Commercial Bank; Rural Cooperative Bank; Performance |
| Abstract | As two different organizational models, debate has existed in academia for a long time on the advantage and disadvantage of joint-stock system and share cooperative system. In China, there exist two types of rural financial institutions: rural commercial bank and rural cooperative bank. The former is based on joint-stock system while the latter is based on share cooperative system, which offers us a natural experiment to compare these two models. Using the data of China's rural commercial banks and rural cooperative banks, this paper investigates the difference in the performance of these two types of institutions and its potential causes for the first time. Major findings include: (1) the performance of rural commercial bank is better than that of rural cooperative bank, which still holds after controlling for selection bias and geographical difference; (2) corporate governance in rural commercial bank is more efficient than that in rural cooperative bank. Besides, corporate governance efficiency is positively correlated with bank’s performance. Therefore, differences in corporate governance efficiency in different models may be an important reason for the performance differences in these two types of financial institutions. This study has an important reference value for China’s rural financial reform in the future. |
| Serial Number | WP322 |
| Time | 2012-08-29 |
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