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The Motivations of Economic Behavior: the Case of Cooperative Credit

Author

Listed:
  • Silvio Goglio

    (University of Trento)

  • Andrea Leonardi

    (University of Trento)

Abstract

This paper investigates the motivation behind economic behaviour in the cooperative credit movement, and some of the inherent problems. In particular, the following hypotheses are analysed: the possibility of maintaining the principles of reciprocity and participation in the case of rapid growth beyond the original group and area; the role and motivations of the social entrepreneurs acting in the bank; corporate social responsibility, which, in the case of a bank, is closely connected to the way in which the community’s savings are employed and investments are selected. The hypotheses are subsequently tested in the historical debate between Schultze Delitzsch’s and Raiffeisen’s approaches. The conclusion is that cooperative behaviour, and in general social responsibility, are more effective and successful when independent from other ends and related to the provision of public goods, which are poorly provided for in the market setting.

Suggested Citation

  • Silvio Goglio & Andrea Leonardi, 2012. "The Motivations of Economic Behavior: the Case of Cooperative Credit," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 1(1), pages 65-84, December.
    • Handle: RePEc:trn:csnjrn:v:1:i:1:p:65-84
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    References listed on IDEAS

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    1. Lorenz Goette & David Huffman & Stephan Meier, 2006. "The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups," American Economic Review, American Economic Association, vol. 96(2), pages 212-216, May.
    2. Ben-Ner Avner & Montias John Michael & Neuberger Egon, 1993. "Basic Issues in Organizations: A Comparative Perspective," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 207-242, June.
    3. Cooter, Robert D., 1994. "Structural adjudication and the new law merchant: A model of decentralized law," International Review of Law and Economics, Elsevier, vol. 14(2), pages 215-231, June.
    4. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    5. Alexopoulos, Yiorgos & Goglio, Silvio, 2011. "Financial Cooperatives: Problems and Challenges in the Post-Crisis Era," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 39(1), pages 1-14.
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    Cited by:

    1. Simon Cornée, 2014. "Soft Information and Default Prediction in Cooperative and Social Banks," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 3(1), pages 89-103, June.

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    More about this item

    Keywords

    self-interest; reciprocity; social entrepreneurship; cooperative credit; Schultze Delitzsch; Raiffeisen; social norms; social responsibility;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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