The x-efficiency and allocative efficiency effects of credit union mergers

The relative efficiency effects of Australian credit union mergers are examined. The period of investigation is June 1992–June 1997, which allows the examination of 16 credit union mergers in the 1993–1994 financial year. Multiple regression is applied to examine the impact of credit union mergers on x-efficiency and allocative efficiency. The data envelopment analysis (DEA) frontier approach is used to provide measures of x-efficiency and allocative efficiency. Results provide statistical evidence that, on average, credit union mergers do not result in an increase in x-efficiency or allocative efficiency postmerger relative to other credit unions.