An update on economies of scale in credit unions

Paired difference analysis of size economies in UK credit unions

“…The second best alternative, as in the work of Kohers and Mullis (1988) and Cox and Whigham (1984), is to examine the operational efficiency of credit unions. In this current study the income statement measure, operating expenses to operating income is employed as the key measure of operational efficiency.…”

“…Cox and Whigham (1984) and Kohers and Mullis (1988) are examples where such a methodology is utilized to analyse US credit unions. The authors argue that cost minimization is synonymous with operational efficiency, and consequently if operational efficiency were to increase as the size of the financial institution increased, then this would be indicative of the existence of scale economies.…”

“…Indeed, important as the achievement of economies of scale is for other retail financial intermediaries, the importance for credit unions is much more pronounced given, in recent years, the unprecedented growth in loans outstanding, assets under control and membership at the level of the individual credit union. Kohers and Mullis (1988), in the context of US credit unions, forward additional arguments as to the importane of scale economies. They suggest that the importance of scale economies rests with the potential conflict that may emerge between members as credit unions grow.…”

The future of credit unions in the United States: evidence from quantitative extrapolations†

“…Especially in the applied Economics literature, CUs was a theme that had been revisited many times in the last three decades starting with the Ryland studies in the 70s (Taylor, 1972(Taylor, , 1979 and following with a series of more sporadic studies in the 80s and 90s (Kebede and Jolly, 2001;Jefferson and Spencer, 1998;Worthington, 1998;McKillop et al, 1995;Bundt and Keating, 1988;Kohers and Mullis, 1988;Smith, 1986); in fact in many regions, CUs seem to be an attractive alternative to high street banks as they provide a different type of access to credit (Handrinos et al, 2007) -and as such they attract the interest of the academia across the globe -UK, USA, New Zeeland -in the recent years (Glass and McKillop, 2006;Sibbald and McAlevey, 2003) …”

Product-line deregulation and the cost structure of US savings and loan associations

“…However, credit unions have been studied by several authors, including Kohers and Mullis (1988), Murray and White (1983) and Taylor (1972).…”