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Measuring Technical Efficiency in Australian Credit Unions

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  • Andrew C. Worthington

Abstract

Credit unions are small, cooperative, not‐for‐profit institutions—facts which usually distinguish them from other financial intermediaries. Whilst 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 non‐parametric 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 being 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.

Suggested Citation

  • Andrew C. Worthington, 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:231-248
    DOI: 10.1111/1467-9957.00144
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    Citations

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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. 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).
    3. Theo Benos & Nikos Kalogeras & Martin Wetzels & Ko De Ruyter & Joost M. E. Pennings, 2018. "Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study," Sustainability, MDPI, vol. 10(12), pages 1-38, December.
    4. Kalundu Kimanzi & Prof. Mirie Mwangi & Dr. Duncan Elly Ochieng & Prof. Josephat Lishenga, 2020. "Moderating Effect of Board Gender Diversity on the Relationship between Financial Structure and Operating Efficiency," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 9(1), pages 1-1.
    5. 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.
    6. Pal, Debdatta, 2010. "Measuring Technical Efficiency of Microfinance Institutions in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 65(4), pages 1-19.
    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.
    8. María-Celia López-Penabad & José Manuel Maside-Sanfiz & Juan Torrelles Manent & Ana Iglesias-Casal, 2020. "Application of the DEA Double Bootstrap to Analyze Efficiency in Galician Sheltered Workshops," Sustainability, MDPI, vol. 12(16), pages 1-21, August.
    9. Almudena Martínez-Campillo & Yolanda Fernández-Santos & María Pilar Sierra-Fernández, 2018. "How Well Have Social Economy Financial Institutions Performed During the Crisis Period? Exploring Financial and Social Efficiency in Spanish Credit Unions," Journal of Business Ethics, Springer, vol. 151(2), pages 319-336, August.

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