Resource Partitioning and Foundings of Banking Cooperatives In Italy

Abstract

Abstract This study of the founding of Italian Rural Cooperative Banks is intended to contribute to the integration of ecological and institutional theories of organization. Specifically, we propose a model according to which institutional practices and expectations related to abstract principles and moral (or noneconomic) values materialize in concrete features of the organizational structure. These constrain the competitive behavior of the organizations assuming that form. These behavioral constraints produce immediate ecological consequences at the industry level in terms of niche width and resource partitioning, which have implications for the persistence (or change) of the original institutionalized practices. Following the law and economics literature (Jensen and Meckling, 1976a, 1979; Williamson, 1985; Hansmann, 1990) organizational forms, and hence organizational diversity, are conceptualized here in terms of alternative property rights arrangements chosen by organizational members to coordinate activities, mediate their personal interests, and resolve potential conflicts. As we explain in detail later, doing so has the advantage of defining the “unobservable blueprint” underlying the notion of organizational form (Hannan and Freeman, 1977) in terms of observable organizational characteristics.