The diversification and financial performance of US credit unions |
| |
Authors: | John Goddard Donal McKillop John OS Wilson |
| |
Institution: | 1. Bangor Business School, Bangor University, Bangor, Gwynedd LL57 2DG, UK;2. School of Management and Economics, Queen’s University, Belfast BT7 1NN, UK;3. School of Management, University of St Andrews, The Gateway, North Haugh, St Andrews, Fife, KY16 9SS, UK |
| |
Abstract: | For US credit unions, revenue from non-interest sources has increased significantly in recent years. We investigate the impact of revenue diversification on financial performance for the period 1993–2004. The impact of a change in strategy that alters the share of non-interest income is decomposed into a direct exposure effect, reflecting the difference between interest and non-interest bearing activities, and an indirect exposure effect which reflects the effect of the institution’s own degree of diversification. On both risk-adjusted and unadjusted returns measures, a positive direct exposure effect is outweighed by a negative indirect exposure effect for all but the largest credit unions. This may imply that similar diversification strategies are not appropriate for large and small credit unions. Small credit unions should eschew diversification and continue to operate as simple savings and loan institutions, while large credit unions should be encouraged to exploit new product opportunities around their core expertise. |
| |
Keywords: | G21 |
本文献已被 ScienceDirect 等数据库收录! |
|