The effect of bundling trade association monitoring and female board representation on loan losses in community credit unions

Ward, Anne Marie, Forker, John and Reilly, Barry (2021) The effect of bundling trade association monitoring and female board representation on loan losses in community credit unions. Nonprofit and Voluntary Sector Quarterly. pp. 1-23. ISSN 0899-7640

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Abstract

Loan book management is important to community credit union survival, particularly in deprived localities. Consistent with agency theory, prior studies of credit unions report an association among individual monitoring mechanisms, trade association monitoring, and female board representation, respectively, and reduced loan losses. This study provides a more nuanced understanding by investigating the moderating influence of these monitoring mechanisms on the relationship between loan losses and deprivation and by considering the effect of bundle combinations of different levels of the two monitoring mechanisms on loan losses. The results reveal that credit unions subject to trade association monitoring have the lowest loan losses. However, in the absence of trade association monitoring, female board representation has a moderating effect on loan losses as deprivation increases. Finally, trade association monitoring and female board representation have a substitutive, rather than a complementary effect on loan losses.

Item Type: Article
Keywords: bundling, credit unions, interaction effects, loan losses, nonprofit monitoring mechanisms
Schools and Departments: University of Sussex Business School > Economics
Depositing User: Barry Reilly
Date Deposited: 22 Mar 2021 09:26
Last Modified: 22 Mar 2021 10:33
URI: http://sro.sussex.ac.uk/id/eprint/97924

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