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Measuring Technical Efficiency in Australian Credit Unions

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  • Worthington, Andrew C

Abstract

Credit unions are small, cooperative, not-for-profit institutions; facts which usually distinguish them from other financial intermediaries. While respecting the unique organizational and institutional features of credit unions, the present study also accepts the need for rigorous efficiency assessment. Using a sample of 233 Australian credit unions the study uses nonparametric techniques to measure efficiency, followed by parametric techniques to attribute variation in efficiency. The results indicate that a large number of credit unions are best-practice efficient, and any efficiencies found appear to flow from X-inefficiencies, rather than from the selection of an inappropriate scale of operations. All other things beings equal, credit unions formed on the basis of a community bond, with a large asset base, and an orientation towards commercial loans, will be relatively more efficient. Copyright 1999 by Blackwell Publishers Ltd and The Victoria University of Manchester

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  • Worthington, Andrew C, 1999. "Measuring Technical Efficiency in Australian Credit Unions," Manchester School, University of Manchester, vol. 67(2), pages 231-248, March.
  • Handle: RePEc:bla:manchs:v:67:y:1999:i:2:p:231-48
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    Cited by:

    1. Mario Fortin & André Leclerc, 2011. "L’Efficience Des Cooperatives De Services Financiers: Une Analyse De La Contribution Du Milieu," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 82(1), pages 45-62, March.
    2. 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, March.
    3. repec:eee:jebusi:v:94:y:2017:i:c:p:43-53 is not listed on IDEAS
    4. Pal, Debdatta, 2010. "Measuring Technical Efficiency of Microfinance Institutions in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 65(4).
    5. Hailu, Getu & Goddard, Ellen W. & Jeffrey, Scott R., 2005. "Measuring Efficiency in Fruit and Vegetable Marketing Co-operatives with Heterogeneous Technologies in Canada," 2005 Annual meeting, July 24-27, Providence, RI 19507, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Brown, Rayna, 2006. "Mismanagement or mismeasurement? Pitfalls and protocols for DEA studies in the financial services sector," European Journal of Operational Research, Elsevier, vol. 174(2), pages 1100-1116, October.
    7. Worthington, Andrew C., 2004. "Determinants of merger and acquisition activity in Australian cooperative deposit-taking institutions," Journal of Business Research, Elsevier, vol. 57(1), pages 47-57, January.

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