Organizational Determinants of Bank Resilience: Explaining the Performance of SME Banks in the Dutch Financial Crisis of the 1920s

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    By the start of the twentieth century, the two organizational forms most used by Dutch banks to raise capital through the dispersal of their ownership were the cooperative association and the public company. Share ownership in cooperatives was typically restricted to customers, while companies permitted outside investors. Neither organizational form dictated specific shareholder liability arrangements. New specialist banks targeting small and medium-sized enterprises (SMEs) combined these two organizational forms and flexible liability rules to create hybrid forms. I find those that took the public company form were more likely to suffer distress during the Dutch financial crisis of the 1920s. Liability arrangements for shareholders, by contrast, had a negligible impact on these banks’ resilience.

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    DOI

    Original languageEnglish
    Pages (from-to)661-690
    JournalBusiness History Review
    Journal publication date07 Mar 2019
    Issue number4 (Winter 2018)
    Volume92
    DOIs
    Publication statusPublished - 07 Mar 2019

      Research areas

    • organizational forms, shareholder liability, banking crises, law and finance hypothesis, the Netherlands

    ID: 160783506