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Ownership Structure and Building Society Efficiency

Author

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  • Tiffany Hutcheson

    (School of Finance and Economics, University of Technology, Sydney, PO Box 123, Broadway NSW 2007; E†mail: Tiffany.Hutcheson@uts.edu.au)

  • Ian G. Sharpe

    (School of Banking and Finance, University of New South Wales, Sydney NSW 2052)

Abstract

This paper investigates the effect of ownership structure on the cost efficiency of Australian building societies using the stochastic econometric frontier approach. Contrary to the expense preference hypothesis, mutually†owned societies were found to be, on average, more cost efficient than those under stock ownership. Moreover, mutual and share†owned societies have significantly different cost functions or production technologies. The results are consistent with the US results of Mester (1993).

Suggested Citation

  • Tiffany Hutcheson & Ian G. Sharpe, 1998. "Ownership Structure and Building Society Efficiency," Australian Journal of Management, Australian School of Business, vol. 23(2), pages 151-168, December.
    • Handle: RePEc:sae:ausman:v:23:y:1998:i:2:p:151-168
    DOI: 10.1177/031289629802300202
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    1. Ruitao Gu & Qiaoyun Zhang & Wei Zhou & Jianxu Liu, 2022. "Judging the True Health of Finance Institutions Based on Risk Behavior and Operation Performance," Mathematical Problems in Engineering, Hindawi, vol. 2022, pages 1-21, November.

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    More about this item

    Keywords

    COST EFFICIENCY; OWNERSHIP DIFFUSION;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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