Abstract: Debate has existed in academia for a long time on the advantage and disadvantage of joint-stock system and share cooperative system, which are two different organizational models. In China, there exist two types of rural financial institutions: rural commercial bank and rural cooperative bank. The former one is based on joint-stock system while the latter one 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 the potential influencing factors for the first time. The main findings include: (1) the performance of rural commercial bank is better than that of rural cooperative bank, even under the condition of considering selection bias; (2) corporate governance in rural commercial bank is more efficient than that in rural cooperative bank, and corporate governance efficiency is positively correlated with bank’s performance. Therefore, corporate governance efficiency difference in different models may be an important reason for the performance discrepancy in these two types of financial institutions. This study has important reference value for China’s future rural financial reform.
Keywords: Joint-stock System, Share Cooperative System, Rural Commercial Bank, Rural Cooperative Bank, Performance
source:Finance & Trade Economics ,No9,2013