IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v73y2025ipas027553192400415x.html
   My bibliography  Save this article

Enterprise value and risk taking in the banking industry: Cooperatives vs. corporations

Author

Listed:
  • Lazzari, Valter
  • Vena, Luigi

Abstract

This study leverages on a quasi-natural experiment to shed light on the relative merit of the cooperative versus the corporate form. In Italy, a new law forced some cooperative banks to turn into joint stocks banks. This change of ownership structure proves to be Pareto improving for all financial claimholders since it either increases or leaves the value of equity and debt of any seniority unchanged, while reducing the market-based metrics of risks. This evidence challenges the view that the demutualization increases the asset substitution risk, transferring wealth from bondholders to shareholders and heightening the firm risk profile. Therefore, a transition from a cooperative to a corporate form should not cause stability concerns in the banking industry.

Suggested Citation

  • Lazzari, Valter & Vena, Luigi, 2025. "Enterprise value and risk taking in the banking industry: Cooperatives vs. corporations," Research in International Business and Finance, Elsevier, vol. 73(PA).
    • Handle: RePEc:eee:riibaf:v:73:y:2025:i:pa:s027553192400415x
    DOI: 10.1016/j.ribaf.2024.102622
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S027553192400415X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2024.102622?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    ownership structure; enterprise value; risk taking; demutualization; banking;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K0 - Law and Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:73:y:2025:i:pa:s027553192400415x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.