Modelling the Performance of Irish Credit Unions, 2002-2010

Financial Accountability and Management, Forthcoming

34 Pages Posted: 6 Jun 2012 Last revised: 24 May 2013

See all articles by J. Colin Glass

J. Colin Glass

Ulster Business School

Donal G. McKillop

Queen's University Management School

Barry Quinn

Queen's University Management School

Date Written: November 5, 2012

Abstract

This study undertakes a modeling based performance assessment of all Irish credit unions between 2002 and 2010, a particularly turbulent period in their history. The analysis explicitly addresses the current challenges faced by credit unions in that the modeling approach used rewards credit unions for reducing undesirable outputs (impaired loans and investments) as well as for increasing desirable outputs (loans, earning assets and members’ funds) and decreasing inputs (labour expenditure, capital expenditure and fund expenses). The main findings are: credit unions are subject to increasing returns to scale; technical regression occurred in the years after 2007; there is significant scope for an improvement in efficiency through expansion of desirable outputs and contraction of undesirable outputs and inputs; and that larger credit unions, that are better capitalised and pay a higher dividend to members are more efficient than their smaller, less capitalised, and lower dividend paying counterparts.

Keywords: Credit unions, Efficiency, impaired loans and investments

JEL Classification: G21

Suggested Citation

Glass, J. Colin and McKillop, Donal G. and Quinn, Barry, Modelling the Performance of Irish Credit Unions, 2002-2010 (November 5, 2012). Financial Accountability and Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2078356 or http://dx.doi.org/10.2139/ssrn.2078356

J. Colin Glass

Ulster Business School ( email )

Co. Londonderry BT37 0QB
Northern Ireland

Donal G. McKillop

Queen's University Management School ( email )

25 University Square
Belfast, Northern Ireland BT7 1NN
Northern Ireland

Barry Quinn (Contact Author)

Queen's University Management School ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

HOME PAGE: http://www.barryquinn.com

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