The Ownership Complaint Gap: Mutual versus Stock Intermediaries

Jiang CHENG, Wenlan QIAN, David M. REEB

Research output: Journal PublicationsJournal Article (refereed)peer-review

8 Citations (Scopus)

Abstract

We document a substantial customer complaint gap between stock and mutual financial firms. To assess whether this 21% per year complaint gap stems from complaint-prone customers in stock insurers, we examine state-adjudicated complaint success. To further delineate between customer selection or treatment explanations, we exploit within insurer complaints around random claims (natural disasters) and attention shocks (media scrutiny). Further tests reveal the complaint gap widens with greater competition, near insolvency thresholds, and with more price regulation. Overall, the results are inconsistent with the hypothesis that mutual financial firms exhibit low customer satisfaction, suggesting customers find this a beneficial organizational structure.
Original languageEnglish
Pages (from-to)1685-1715
Number of pages31
JournalJournal of Financial and Quantitative Analysis
Volume55
Issue number5
Early online date24 Jul 2019
DOIs
Publication statusPublished - Aug 2020

Funding

Cheng gratefully acknowledges the support of the National Natural Science Foundation of China (Grant No. 71573164).

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