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Forum | Papers » Modeling stakeholders’ behavior in alternative banks: is size a limit to specialness?

Modeling stakeholders’ behavior in alternative banks: is size a limit to specialness?

Davide Castellani, Laura Viganò
December 2015 - n. 12
Jel codes: G21

A common belief is that the specialness of alternative banks pertains to their ethical orientation, i.e., the values they state to follow in shaping objectives, strategies, operations and products. Assessing the ethics of their behavior is a subtle exercise but the specialness of alternative banks emerges by looking at the offer of financial services and at the banks' profitability. In fact, these banks aim at satisfying the expectations of a market niche sensitive to social impact of economic and financial transactions (i.e. «social investors»), by offering specialized products. How do alternative banks differ in terms of products offering? How does their banking model meet stakeholders' expectations? What is the impact on profitability? Starting from the analysis of the drivers of the behaviors of the main alternative banks' stakeholders, which define the bank's objective function and affect the bank's profitability, this study explores if specialness can hold in all conditions and when alternative banks are similar to traditional ones. Size emerges as a key element for preserving specialness and ethical orientation. The case of Alternative Bank Schweiz (Abs) supports this view

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