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Multiple Goals and Ownership Structure: Effects on the Performance of Spanish Savings Banks

By Miguel A. García-cestona, Jordi Surroca and Iii Madrid

Abstract

Spanish savings banks are financial institutions with a wide mission that comprises stakeholders ’ different goals. Thus, profit maximization is only one of the several goals to be achieved, and the widespread use of cost or profit efficiency as the unique comparative measure among banks may prove to be insufficient in this context. To overcome this problem, we build an overall performance measure for organizations that maximize a wide mission with multiple goals. We distinguish two types of savings banks: those controlled by Public Administrations and savings banks controlled by insiders. Each group implies a different arrangement of goals and differences across their performance indexes. Once we control for technology differences, our results show that insider-controlled savings banks favor those goals related to economic efficiency and universal access; furthermore, they perform better. On the other hand, regional development becomes the most favored goal when Public Administrations enjoy the control

Topics: Stakeholders, Efficiency, Weights, Corporate Governance, Savings Banks. JEL clasification, D21, D24, G21, G34, G38
Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.198.9701
Provided by: CiteSeerX
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