Can mergers ensure the survival of credit unions in the third millennium?

The survival of small financial institutions in the third millennium depends on their competitiveness against large bank rivals. Accordingly, credit unions in Australia and the United States have attempted to increase efficiency through mergers. Our paper uses the data envelopment analysis methodolo...

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Bibliographic Details
Published in:Journal of banking & finance 2001-12, Vol.25 (12), p.2277-2304
Main Authors: Ralston, Deborah, Wright, April, Garden, Kaylee
Format: Article
Language:English
Subjects:
Australia
Banking
Credit co-operatives
Credit unions
Data analysis
Efficiency
Finance
Financial institutions
Mergers
U.S.A
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Summary:The survival of small financial institutions in the third millennium depends on their competitiveness against large bank rivals. Accordingly, credit unions in Australia and the United States have attempted to increase efficiency through mergers. Our paper uses the data envelopment analysis methodology to evaluate the post-merger gains in technical and scale efficiency achieved by 31 Australian credit union mergers in 1993/1994 and 1994/1995, relative to non-merging credit unions. When compared with the only US study of credit union mergers [Journal of Banking & Finance 23 (1999) 367–386], our findings suggests that mergers are not associated with improvements in efficiency superior to those achieved by internal growth.
ISSN:0378-4266
1872-6372
DOI:10.1016/S0378-4266(01)00193-5