Abstract
The paper proposes an empirical investigation of scale economies, scope economies, and market power of the network organizational structure of Italian cooperative banks. For 452 cooperative banks (and a control group of 223 commercial banks) over 2006–2018, empirical findings show that cooperative banks experienced cost economies of scale and scope, but they experienced scale diseconomies and constant scope economies on the revenue side. Unlike commercial banks, cooperative banks did not seem to benefit on the earnings side from increases in scale and diversification. Moreover, cooperative banks experience greater market power than commercial banks. Traditional advantages, in terms of network economies and relationship lending, are proven empirically to persist for the network organizational structure.
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