The Effect of Bundling Trade Association Monitoring and Female Board Representation on Loan Losses in Community Credit Unions

Ann-Marie Ward, John Forker, Barry Reilly

Research output: Contribution to journalArticlepeer-review

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 between 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.
Original languageEnglish
JournalNonprofit and Voluntary Sector Quarterly
DOIs
Publication statusAccepted/In press - 6 Jan 2021

Keywords

  • bundling
  • Credit unions
  • interaction effects
  • loan losses, non-profit monitoring mechanisms

Fingerprint Dive into the research topics of 'The Effect of Bundling Trade Association Monitoring and Female Board Representation on Loan Losses in Community Credit Unions'. Together they form a unique fingerprint.

Cite this