MEASURING THE DOUBLE BOTTOM LINE OF RAIFFEISEN COOPERATIVE BANKS IN ITALY: A DEA APPROACH TO EFFICIENCY

Abstract The Raiffeisen system, like many cooperative organizations worldwide, is recognized as part of the social economy. This economic framework primarily took shape in the 19th century as a response to the challenges brought about by the Industrial Revolution, which intensified capitalism and exacerbated social inequalities, often accompanied by poor working conditions. Against this historical backdrop, societal and cultural advancements fostered the adoption of mutualist and solidarity-based principles, influenced by movements such as utopian socialism and social Christianity. Emerging in mid-19th century Germany, the Raiffeisen system was developed to combat widespread rural poverty and financial exclusion. Friedrich Raiffeisen envisioned cooperative financial institutions that would empower small farmers and rural communities by granting them access to affordable credit and enhancing their economic resilience. This model proved particularly well-suited to Alto Adige (South Tyrol), where strong traditions of selfsufficiency and community solidarity naturally aligned with cooperative principles. In South Tyrol, Raiffeisen Cooperative Banks (Raiffeisen Banks) developed as a network of locally managed financial institutions tailored to the region’s distinctive linguistic, cultural, and economic landscape. Today, they are an integral component of the Raiffeisenverband Südtirol (Raiffeisen Association of South Tyrol), which offers support, coordination, and supervision. This research examines the performance of cooperative banks in Italy, with a specific emphasis on Raiffeisen Cooperative Banks, to evaluate their effectiveness in achieving both financial and social efficiency. Utilizing the Data Envelopment Analysis (DEA) model, the study investigates the extent to which these banks manage to balance profitability with their social commitments. The results indicate that, while financial efficiency is robust, social efficiency presents opportunities for improvement. Furthermore, the study suggests that if no trade-offs were necessary, Raiffeisen Cooperative Banks could achieve both objectives simultaneously without constraints.