Comment on Fried, Lovell, and Yaisawarng

Article Abstract:

There is enough evidence to suggest that the service provision of credit unions improves following a merger. This observation is supported by data on the performance of credit unions before and after a merger during the 1989-1994 period. Acquired credit unions are likely to benefit from consolidation if they have room for improvement with respect to loan portfolios and return on investment while acquiring firms are likely to benefit from such deals if they have prior experience with mergers and select employee groups. In general, there is a greater likelihood for credit unions to benefit from a merger when there is greater disparity between merger partners.

Economic aspects

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The impact of mergers on credit union service provision

Article Abstract:

Consolidation appears to have no adverse impact on the service provision of credit unions. This is evident in a study of the performance of 1,654 credit unions before and after a merger during the 1989-1994 period. On the contrary, an immediate improvement in service provision is experienced by members of acquired credit unions following a merger. Roughly half of the acquiring credit unions, however, suffer a decline in service provision in the post-merger period, although both acquiring and acquired credit unions are more likely to benefit from consolidation if they are different.

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Evaluating the performance of US credit unions

Article Abstract:

Article examines the performance of credit unions in the US. The sample consists of two-thirds of all active credit unions in 1990. Performance critera preserves the unique institutional and organizational features of credit unions, in addition to keeping sight of how they compete with other financial institutions. The study incorporates nonparametric, nonstochastic techniques to measure performance and parmetric stochastic methods to attribute performance variation to features of the credit union.

Evaluation

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