Frontier Efficiency Measurement in Deposit-taking Financial Mutuals: A Review of Techniques, Application, and Future Research Directions
AbstractDespite the global importance of mutuals in financial services, and the universal need to measure and improve organizational efficiency in all deposit-taking institutions, it is only relatively recently that the most advanced econometric and mathematical programming frontier techniques have been applied. This paper provides a synoptic survey of the comparatively few empirical analyses of frontier efficiency measurement in deposit-taking financial mutuals, comprising savings and loans, building societies and credit unions in Australia, the UK, and the USA. Both estimation and measurement techniques and the determinants of efficiency are examined. Particular focus is placed on how the results of these studies may help inform regulatory policy and managerial behaviour. Copyright ï¿½ 2010 The Author Journal compilation ï¿½ CIRIEC 2010.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Griffith University, Department of Accounting, Finance and Economics in its series Discussion Papers in Finance with number finance:200911.
Date of creation: Nov 2009
Date of revision:
Contact details of provider:
Postal: Nathan, Brisbane, Queensland, 4111
Phone: (07) 3875-5364
Fax: (07) 3875-7750
Web page: http://www.griffith.edu.au/business-commerce/griffith-business-school/departments/department-accounting-finance-economics
More information through EDIRC
Data envelopment analysis; Stochastic frontier analysis; Technical; allocative; Productive; Profit and cost efficiency; Credit unions; Building societies; Savings and loans;
Other versions of this item:
- Andrew C. Worthington, 2010. "Frontier Efficiency Measurement In Deposit-Taking Financial Mutuals: A Review Of Techniques, Applications, And Future Research Directions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 81(1), pages 39-75, 03.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Worthington, Andrew C., 1999. "Malmquist indices of productivity change in Australian financial services," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 9(3), pages 303-320, August.
- Cebenoyan, A Sinan & Cooperman, Elizabeth S & Register, Charles A, 1993. "Firm Efficiency and the Regulatory Closure of S&Ls: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 540-45, August.
- Andrew C. Worthington, 2001. "Efficiency in pre-merger and post-merger non-bank financial institutions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(8), pages 439-452.
- Fried, Harold O. & Lovell, C. A. Knox & Yaisawarng, Suthathip, 1999. "The impact of mergers on credit union service provision," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 367-386, February.
- Ralston, Deborah & Wright, April & Garden, Kaylee, 2001. "Can mergers ensure the survival of credit unions in the third millennium?," Journal of Banking & Finance, Elsevier, vol. 25(12), pages 2277-2304, December.
- Fenn, Paul & Vencappa, Dev & Diacon, Stephen & Klumpes, Paul & O'Brien, Chris, 2008. "Market structure and the efficiency of European insurance companies: A stochastic frontier analysis," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 86-100, January.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Berger, Allen N. & Humphrey, David B., 1997.
"Efficiency of financial institutions: International survey and directions for future research,"
European Journal of Operational Research,
Elsevier, vol. 98(2), pages 175-212, April.
- Allen N. Berger & David B. Humphrey, 1997. "Efficiency of financial institutions: international survey and directions for future research," Finance and Economics Discussion Series 1997-11, Board of Governors of the Federal Reserve System (U.S.).
- Allen N. Berger & David B. Humphrey, 1997. "Efficiency of Financial Institutions: International Survey and Directions for Future Research," Center for Financial Institutions Working Papers 97-05, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Fried, Harold O. & Knox Lovell, C. A. & Eeckaut, Philippe Vanden, 1993. "Evaluating the performance of US credit unions," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 251-265, April.
- Esho, Neil & Sharpe, Ian G, 1996. "X-Efficiency of Australian Permanent Building Societies, 1974-1990," The Economic Record, The Economic Society of Australia, vol. 72(218), pages 246-59, September.
- J. Colin Glass & Donal McKillop, 2006. "The impact of differing operating environments on US Credit Union Performance, 1993-2001," Applied Financial Economics, Taylor and Francis Journals, vol. 16(17), pages 1285-1300.
- Andrew Worthington, 1998. "The determinants of non-bank financial institution efficiency: a stochastic cost frontier approach," Applied Financial Economics, Taylor and Francis Journals, vol. 8(3), pages 279-287.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Garden, Kaylee A. & Ralston, Deborah E., 1999. "The x-efficiency and allocative efficiency effects of credit union mergers," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 9(3), pages 285-301, August.
- Cummins, J. David & Xie, Xiaoying, 2008. "Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 30-55, January.
- McKillop, D. G. & Glass, J. C. & Ferguson, C., 2002. "Investigating the cost performance of UK credit unions using radial and non-radial efficiency measures," Journal of Banking & Finance, Elsevier, vol. 26(8), pages 1563-1591, August.
- Loretta J. Mester, .
"Efficiency in the Savings and Loan Industry,"
Rodney L. White Center for Financial Research Working Papers
26-92, Wharton School Rodney L. White Center for Financial Research.
- Worthington, Andrew C, 1999. "Measuring Technical Efficiency in Australian Credit Unions," Manchester School, University of Manchester, vol. 67(2), pages 231-48, March.
- Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
- Richard F. Garbaccio & Benjamin E. Hermalin & Nancy E. Wallace, 1994. "A Comparison of Nonparametric Methods to Measure Efficiency in the Savings and Loan Industry," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 22(1), pages 169-193.
- Berger, Allen N. & Hunter, William C. & Timme, Stephen G., 1993. "The efficiency of financial institutions: A review and preview of research past, present and future," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 221-249, April.
- Andrew Worthington, 1998. "Efficiency in Australian building societies: an econometric cost function approach," Applied Financial Economics, Taylor and Francis Journals, vol. 8(5), pages 459-467.
- Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
- Drake, Leigh & Weyman-Jones, Thomas G, 1996. "Productive and Allocative Inefficiencies in U.K. Building Societies: A Comparison of Non-parametric and Stochastic Frontier Techniques," The Manchester School of Economic & Social Studies, University of Manchester, vol. 64(1), pages 22-37, March.
- Esho, Neil, 2001. "The determinants of cost efficiency in cooperative financial institutions: Australian evidence," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 941-964, May.
- Helen Higgs & Andrew C. Worthington, 2010. "Economies of Scale and Scope in Australian Superannuation Funds," Discussion Papers in Finance finance:201015, Griffith University, Department of Accounting, Finance and Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dr. Alexandr Akimov).
If references are entirely missing, you can add them using this form.