Paired difference analysis of size economies in UK credit unions

This study utilizes a paired difference approach to investigate for the existence of scale economies in UK credit unions. The analysis is conducted for both credit unions in aggregate as well as a number of sub-groups with the latter defined in terms of the trade organization to which credit unions are affiliated. This decomposition was viewed as particularly important in that the respective umbrella organizations have different growth strategies. The analysis revealed that significant efficiency gains are available through credit unions adopting a policy of asset growth. This finding held good irrespective of the umbrella organization to which credit unions belong although the analysis also revealed that the opportunity for efficiency gains was not so pronounced for the members of one of the trade organizations - the National Federation of Credit Unions. This finding was due to the NFCU's much more overt emphasis on self-help and community development, particularly in areas of economic disadvantage.     

An update on economies of scale in credit unions

When employing the Benston-Bell-Murphy cost specification, most studies on economies of scale in financial institutions have consistently found small, yet significant economies. However, when a similar approach on credit unions was used, the results were conflicting. This paper, through the use of a different methodological and statistical approach, provides additional evidence on the existence of economies of scale in credit unions.     

Examination of economies of scale in credit unions: a New Zealand study

Recent government pressure and aspirations within the industry itself to improve financial stability, have seen credit unions pursue economies of scale to achieve this objective. This presented an opportunity to test the validity of this strategy. However, this study is uncommon, as it utilized the credit union population as the unit of analysis, rather than a sample, prevalent in other research. As a consequence this overcomes difficulties associated with multiple testings, and other statistical problems present in some other previous studies. By drawing upon two measures of operational efficiency, viz. operating costs to income and operating costs to total assets, inconclusive evidence of scale economies was found. While clear efficiency improvement occurred in moving from small to medium sized organisations, less compelling was the evidence of economies of scale in larger credit unions. Although the article followed a conventional cross-sectional methodology by examining performance at a moment in time, the study also adopted a longitudinal case study approach, by examining over time the efficiency of a large credit union. Finally, the measure used, inclusion or exclusion of outliers, and the operational efficiency ratio chosen, all effect the outcome, and either showed evidence of economies or diseconomies, of scale.     

Estimation des Économies D'échelle et de gamme dans de petites coopératives de services financiers: le cas des caisses populaires acadiennes

This study uses accounting data stemming from 80 credit unions affiliated to the "Fédération des caisses populaires acadiennes" to estimate a multi-product translog cost function with the aim to test for the presence of scale and scope economies. The cost model relies on the production approach and the financial services are gathered in four categories of products. The model is completed by three inputs and one control variable, the latter being used to capture the heterogeneity of costs arising from the average wealth of membership. Since the estimated output elasticity of the total cost, 0.89, is statistically less than one, the models detect quite important scale economies. As to scope economies, they are present but the coefficients are weakly significant.     

NEW ZEALAND CREDIT UNION MERGERS

ABSTRACT ** : Research into the benefits of mergers in small financial institutions, in particular credit unions, is sparse. This study helps to fill this gap by analyzing recent intense merger activity in New Zealand credit unions. The major driver for these mergers was not the usual reason of attempting to increase efficiency for competitive purposes but rather enforced government action. Data envelopment analysis is used to explore changes in efficiency in merged credit unions between 1996 and 2001. Those credit unions not involved in merger activity are used as a control group. Overall, credit unions have become more efficient over the period, notably in those that undertook mergers. The Malmquist index indicates significant technological progress over the period but a slight regression in terms of efficiency.     

'Social Democracy on the Back Foot': The ALP and the 'New' Australian Model

Politicians hope that technological innovation will mitigate the threat of climate change and expect that capitalism will most efficiently deliver the necessary technologies. Yet capitalism is not monolithic. The Varieties of Capitalism approach suggests that capitalist states fall within a spectrum between liberal market economies (LMEs) and coordinated market economies (CMEs). How do the relative styles of technological innovation in LMEs versus CMEs affect their ability to reduce carbon emissions? This article addresses this question by investigating the relative technological styles and strengths of LMEs and CMEs, and comparing them to the technological development needed to combat climate change. While technological change in CMEs tends to be more incremental, LMEs, with their greater orientation to competitive markets, are said to better support radical technological change. This article finds that the US's LME variety of capitalism hampers its ability to address climate change by comparison to CMEs such as Germany and Japan, and therefore suggests that the US's lack of leadership on climate change is as much a consequence of its variety of capitalism as an absence of political will.     

我国科技创新效率的实证研究——基于DEA-Malmquist模型和中国省际面板数据

运用DEA-Malmquist模型对2002—2010年我国省域科技创新效率进行了静态和动态分析。研究结果表明:十六大以来,我国整体科技创新的投入、产出是有效的;我国科技创新效率存在明显的梯度特征,即南部沿海经济区的科技创新效率最高,东北综合经济区的科技创新效率最低,部分省份仍然存在投入冗余和产出不足的情况;全要素生产率的改善主要得益于技术进步和规模效率的改进,但是各地区全要素生产率的改善并不均匀。最后指出,未来发展仍需合理调节资源配置、提高科技成果转化效率、制定和实施促进科技成果转化等各种措施。     

Analysis on total factor productivity of Chinese provincial economy

This paper applies the nonparametric DEA-Malmquist index approach to estimate total factor productivity growth, efficiency change and the rate of technological progress from 1979 to 2003. This is done to conduct analysis on the total factor productivity of China’s provincial economy. Analysis on the evolution of distribution dynamics of relative labor productivity, relative total factor productivity, relative efficiency and relative technological progress is done by using kernel density estimation for the period from 1979 to 2003 in 29 provinces of China. Our analysis indicates that disparities of provincial economic growth are large and have been increasing owing to the relatively large and increasing disparities of total factor productivity growth especially the rate of technological progress. __________ Translated from The Journal of World Economy (世界经6D4E;), 2005, (5) (in Chinese)     

CUSTOMER‐OWNED BANKING IN AUSTRALIA: FROM CREDIT UNION TO MUTUAL BANK

Since the 1990s financial sector regulation in Australia has treated credit unions and building societies the same as banks under the designated title of authorized depository institutions. This allows credit unions to choose between different organizational structures: cooperative; convert to customer‐owned banks or to demutualize. This article utilizes semi‐structured interviews to analyse the key motivations for organizational change. It examines a number of credit unions and their conversion experience to customer‐owned banks. It finds that adaptation of the credit union model was necessary to change customer perceptions, ensure future growth in the customer base and assets, and facilitate access to capital raisings with the credit rating of a bank. Despite this change customer‐owned banks retain the core principals of mutuality.     

The problem of market size for Canadian cable television regulation

The policy of the Canadian radio television and telecommunications commission of awarding an exclusive right to provide cable television (CATV) service within a given licensed service area (LSA) rests partly on the presumption that CATV costs reflect economies of scale that are large relative to market size. Cost estimates from crosssections of CATV operations from 1985–1991 show increasing returns to scale and suggest that many LSAs were too small to capture these economies. The results also indicate that economies of scale for basic service declined over the 1980s and that the ‘natural monopoly’ characteristics of CATV may be eroded by further technological and regulatory changes.     

A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration

This paper studies the degree of integration of China's domestic market and investigates the determinants of inter‐provincial trade barriers under the rubric endogenous trade policy theory. I rely on industry‐level trade flows extracted from provincial input–output tables to develop a model that analyzes the magnitude and evolution of Chinese provinces’ engagement in domestic trade by computing all‐inclusive indicators of trade barriers. Results underline that over the 1990s, not only was China's domestic market fragmentation along provincial borders great, but it also has become more severe at least between 1992 and 1997. The investigation of province‐level and industry‐level trade barriers confirms the relevance of applying the framework of endogenous protection to explain the level of impediments to trade between Chinese provinces. Findings emphasize that provinces’ domestic trade protection pursues a dual objective of socio‐economic stability preservation and fiscal revenues maximization.     

Manager bonding and the technical efficiency of cooperative credit unions-parametric and non-parametric analyses

We engage parametric and non-parametric approaches to analyze unbalanced data (2012–16) from 225 credit unions in Ghana. The non-parametric analysis involves using data envelopment analysis to assess the technical efficiency of the credit unions. We show that most of them are not technically efficient. The average five-year overall technical efficiency and pure technical efficiency scores of a credit union are 0.87 and 0.91 respectively. Targeted at inquiring whether manager bonding significantly connects with the technical efficiency of credit unions, the parametric analysis which involves the use of probit and logit regression techniques, shows that, generally, the bonding of managers hurts the technical efficiency of credit unions. We are, thus, led to the conclusion that bonding of managers may not be in the best interest of credit unions in Ghana.     

中国省域科技创新与生态环境协调发展的时空特征

以中国30个省(自治区、直辖市)为研究对象,构建了科技创新与生态环境综合评价指标体系,采用变异系数法和协调发展度模型,实证测算了2009—2013年中国省域科技创新与生态环境协调发展度并分析了其时空特征。结果表明:中国省域整体科技创新综合发展水平明显滞后于生态环境综合发展水平,且中、西部地区和东北地区的所有省份均属于科技创新滞后型;科技创新与生态环境协调发展度总体偏低且变化平稳,但考察期内不同省份存在明显的时间分异,并呈现出显著的"东高、中西低"的空间分布格局。     

Depository institution competition in the deregulated environment: the case of the large credit union

The purpose of this paper is to analyse the effect of deregulation and enhanced competition on the costs and performance of large credit unions. Using a sample of large credit unions over the period 1979 through to 1985, we find no evidence that credit unions' average costs have risen, nor do we find evidence that credit unions have suffered adverse changes in operating margins. Large credit unions not only compete with other depository institutions, but appear to have responded well in the newly competitive environment.     

Scale And Scope In Technology: Large Firms 1930/1990

We examine historical empirical patterns of change in corporate. technological scale and scope. Much literature on scale and scope by business and economic historians has conflated product markets and technology together. However, given the technologically complex environment of the late twentieth century, the relationship between scale and scope in production and products is not simple, and conflated discussions may be naive. Consequently we have two aims. Firstly, we wish to see if technological scale and scope follow the historical pattern of broader notions of scale and scope. Secondly, given increasing technological complexity, we consider whether the nature of corporate technological scope has changed over time.

Using data drawn from the University of Reading's patents database, we examine the technological activities in 32 of the world's historically largest patenting firms over the period 1930 to 1990. Shin-sham analyses based on panel-data regressions examine the different influences on technologicascope over time. A technological trend closely resembling that of broader notions of scale to scope is observable in most of the sectors. although it does not proceed uniformly. We also find, that whilst increases in corporate technological scope through diversification are not particularly linked to technological relatedness in recent times, they are periodically influenced by the rise of pervasive, fast-growing new technologies.     

Estimating technical change by nonparametric methods

A nonparametric method using dynamic data envelopment analysis is developed here to specify and estimate a dynamic production frontier. By this technique technological progress measured by the time shift of the production frontier and the scale economies measured by increasing returns to scale are estimated from the observed input output data, which may sometimes be nonstationary. An application to US computer industry exhibits substantial technological progress and scale economies over the period 1987–1998.     

Credit unions and risk

The structure of the credit union industry has been transformed by regulatory changes and the subsequent switch by many credit unions to community and multiple-bond fields of membership. This study explores the impact of these trends by testing for differences in risk across credit unions with different field-of-membership types. In tests for differences in risk of bankruptcy and of breaching regulatory standards, risk is found to be greater for credit unions with broader field-of-membership types. These differences in risk appear to derive from greater earnings volatility and lower ROA and net-worth ratios at community and multiple-bond credit unions. These differences in risk decline with greater asset size. Evidence is also presented that credit unions that switched from single-bond institutions to broader field-of-membership types now operate with greater risk.     

Capital Inflows,Exchange Rate Flexibility and Credit Booms

Historically, capital flow bonanzas have often fueled sharp credit expansions in advanced and emerging market economies alike. Focusing primarily on emerging markets, this paper analyzes the impact of exchange rate flexibility on credit markets during periods of large capital inflows. It is shown that bank credit is larger and its composition tilts to foreign currency in economies with less flexible exchange rate regimes, and that these results are not explained entirely by the fact that the latter attract more capital inflows than economies with more flexible regimes. The findings thus suggest countries with less flexible exchange rate regimes may stand to benefit the most from regulatory policies that reduce banks' incentives to tap external markets and to lend/borrow in foreign currency; these policies include marginal reserve requirements on foreign lending, currency‐dependent liquidity requirements and higher capital requirement and/or dynamic provisioning on foreign exchange loans.     

Rapid Technology Change, ‘Technological Visions’, Corporate Organisation And Market Structure

This paper is a contribution to the analysis of how rapid technology change influences market structure. The paper uses a simple simulation model to explore the effects of four main factors on the development of market structure. These are: (1) the variance (or unpredictability) of the technology trajectory; (2) the speed with which the organisation's ‘technological vision’ adjusts to ongoing technological developments; (3) the absorptive capacity of each division in the multi-divisional firm to experience gained in other divisions; (4) the extent to which competence-destroying innovations generate greater cost penalties for the division of a multi-divisional firm than for a comparable mono-divisional firm. Simultion results are obtained for 100 technological trajectories, and a variety of parameterisations. While there is a tendency for noisier trajectories to disadvantage the larger multi-divisional firm, there are conditions under which such a firm benefits from a noisy technological environment. When competence-destorying innovations affect the division of a multi-divisional firm no worse than the comparable mono-divisional firm, the multi-divisional firm is not disproportionately affected by a noisy trajectory. It may, however, be seriously damaged by a slow adjustment of technological vision, especially when all scale economies are dynamic (rather than static). The simulations confirm that the absorptive capacity of each division to experience from others can be critical in determining the ultimate market structure. A brief empirical motivation for the model is offered by reference to some case studies of the semiconductor industry.     

SOME NEW EVIDENCE ON COMPETITION IN PAYDAY LENDING MARKETS

A critical question in the policy debate about payday lending is whether other financial institutions can plausibly provide attractive and lower‐priced substitutes for standard payday loans. I present several new pieces of evidence addressing the question, focusing on whether credit unions, which are often held as the strongest potential competitors to payday lenders, do (or might) viably compete in the payday loan market. National payday loan offerings by credit unions show that very few credit unions currently offer payday loans. Credit union industry reports suggest that those credit unions offering such loans seem unwilling or unable to undercut substantially the prevailing prices set by payday lenders. Those industry reports also reveal that lower‐priced credit union loans generally ration riskier borrowers out of the market by imposing greater restrictions on approval and repayment; risk‐adjusted prices for credit union payday loans may not be lower at all. Survey evidence suggests that most current payday borrowers prefer higher‐priced but less restrictive standard payday loans to lower‐priced but more restrictive alternatives offered by credit unions. The combined demand‐ and supply‐side evidence suggests that one should not expect credit unions (or by extension banks) to offer lower‐priced, higher‐quality alternatives for consumers who currently use payday loans. (JEL G2, L0, L5)