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RESEARCH PRODUCT

Governance and scope economies in microfinance institutions

Christopher F. ParmeterValentina HartarskaDenis A. NadolnyakRoy Mersland

subject

MicrofinanceScope (project management)EconomylawCorporate governanceEconomicsIntermediationDiseconomies of scaleRepresentation (politics)Cost savingslaw.invention

description

This paper studies the relation between board size and composition and cost savings (scope economies) from combining savings mobilisation and lending by Microfinance Institutions (MFIs). The findings support the hypothesis that employee representation on the board is associated with positive scope economies, possibly due to internal knowledge. However, CEO-Chairman duality is associated with equal or larger probability of scope diseconomies, which is consistent with previous findings. Representation

https://doi.org/10.1504/ijcg.2013.055174