The impact of the equity ratio on membership in cooperative banks during the financial crisis

Member orientation is one of the cornerstones of cooperative banks. Members form not only the ideal but also the material basis of cooperatives. In this paper, we examine the relationship between financial ratios, in particular the equity ratio, and the membership development of cooperative banks in Germany. Our empirical study with cross-sectional and longitudinal analyses is based on survey and balance sheet data from cooperative banks for the period 2002 to 2022. In particular, we use a quasi-experimental design to show that cooperative banks in Germany were able to successfully respond to adjustment requirements regarding the equity ratio during the financial crisis by attracting new members and increasing members’ financial commitment.