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 language | English |
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Pages (from-to) | 1685-1715 |
Number of pages | 31 |
Journal | Journal of Financial and Quantitative Analysis |
Volume | 55 |
Issue number | 5 |
Early online date | 24 Jul 2019 |
DOIs | |
Publication status | Published - Aug 2020 |
Funding
Cheng gratefully acknowledges the support of the National Natural Science Foundation of China (Grant No. 71573164).