I also explain which type of banks across different categories had a better performance. This part will be an important contribution to literature because it was never explored before. The second part of my dissertation addresses the question of the implications of the structure of corporate governance of banks. In a country with a vague institutional framework and large informational asymmetries there were a lot of intricacies inside the organization of these arrangements. I then explain the underlying mechanisms of incentives that might have affected corporate control and decision-making.
Corporate governance is related to the way banks organized their business activity.
Some banks extended through a decentralized system of affiliates, others remained as centralized businesses. Organizational theorists, economists of banking, and sociologists have been concerned with the implications of this, but there is consensus about the optimal organizational form of a firm. I show in this part of the dissertation the models of organization followed by Mexican banks and their implications for a bank s performance. I argue that the networks formed by the interlocking boards of Mexican banks served as a device for transmission of information. The informational exchange that arose from the network of bankers prevented bad business.