Are all U.S. credit unions alike?

This paper raises concerns about the econometric approach used in the literature to estimate credit unions’ production technologies. We show that the existing studies did not recognize heterogeneity amongst credit unions’ technologies as captured by (endogenously selected) differing output mixes. Fa...

Full description

Autores:
Malikov, Emir
Restrepo, Diego A.
Kumbhakar, Subal C.
Tipo de recurso:
Fecha de publicación:
2013
Institución:
Universidad EAFIT
Repositorio:
Repositorio EAFIT
Idioma:
eng
OAI Identifier:
oai:repository.eafit.edu.co:10784/999
Acceso en línea:
http://hdl.handle.net/10784/999
Palabra clave:
Credit Union
Returns to Scale
Switching Regressions
Selection
Panel
Fixed Effects
Rights
License
Acceso abierto
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spelling Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees2013-07-11T21:28:28Z2013-04-112013-07-11T21:28:28Zhttp://hdl.handle.net/10784/999C33C34G21This paper raises concerns about the econometric approach used in the literature to estimate credit unions’ production technologies. We show that the existing studies did not recognize heterogeneity amongst credit unions’ technologies as captured by (endogenously selected) differing output mixes. Failure to account for the above leads to biased, inconsistent estimates and potentially misleading results. The estimates are also likely to be biased due to unobserved credit union specific effects that the literature broadly ignores. To address these concerns, we develop a generalized model of endogenous switching with polychotomous choice that is able to account for fixed effects in both the technology selection and the outcome equations. We use this model to estimate returns to scale for the U.S. retail credit unions from 1994 to 2011. Unlike recent studies, we find that not all credit unions enjoy increasing returns to scale. A nonnegligible number of large institutions operate at decreasing returns to scale, indicating that they should either cut back in size or switch to a more efficient technology by re-optimizing the output mix.engUniversidad EAFITEscuela de Economía y FinanzasAre all U.S. credit unions alike?workingPaperinfo:eu-repo/semantics/workingPaperDocumento de trabajo de investigacióndrafthttp://purl.org/coar/version/c_b1a7d7d4d402bccehttp://purl.org/coar/resource_type/c_8042Acceso abiertohttp://purl.org/coar/access_right/c_abf2Credit UnionReturns to ScaleSwitching RegressionsSelectionPanelFixed EffectsMalikov, EmirRestrepo, Diego A.Kumbhakar, Subal C.emalikov@binghamton.edudrestr16@eafit.edu.cokkar@binghamton.eduORIGINAL2013_17_Diego_A_Restrepo_new.pdf2013_17_Diego_A_Restrepo_new.pdfapplication/pdf917666https://repository.eafit.edu.co/bitstreams/41534476-66ee-4e02-9e29-e1b657f796a3/downloade4dfb427982cf8bb6dd5f84c62c35fafMD53LICENSElicense.txtlicense.txttext/plain; charset=utf-8968https://repository.eafit.edu.co/bitstreams/a1fd7750-4f2f-491d-a8c1-873dc8d19d6a/download4cc960a42e07fca3808fbd6b90ab2a1fMD5210784/999oai:repository.eafit.edu.co:10784/9992024-03-05 14:06:17.568open.accesshttps://repository.eafit.edu.coRepositorio Institucional Universidad EAFITrepositorio@eafit.edu.coQXV0b3JpemFjacOzbiBkZSBQdWJsaWNhY2nDs24gZGUgVmVyc2nDs24gZWxlY3Ryw7NuaWNhIGRlIGxhIFRlc2lzIG8gcHJveWVjdG8gZGUgR3JhZG8uClBvciBtZWRpbyBkZSBlc3RlIGVzY3JpdG8gYXV0b3Jpem8gZW4gZm9ybWEgZ3JhdHVpdGEgeSBwb3IgdGllbXBvIGluZGVmaW5pZG8gYSBsYSBVbml2ZXJzaWRhZCBFQUZJVCBwYXJhIHNpdHVhciBlbiBsYSBCaWJsaW90ZWNhIEx1aXMgRWNoYXZhcnLDrWEgVmlsbGVnYXMgdW4gZWplbXBsYXIgZGVsIHRyYWJham8gY29uIGVsIGZpbiBkZSBzZXIgY29uc3VsdGFkbyBwb3IgZWwgcMO6YmxpY28uCgpJZ3VhbG1lbnRlIGF1dG9yaXpvIGVuIGZvcm1hIGdyYXR1aXRhIHkgcG9yIHRpZW1wbyBpbmRlZmluaWRvIGEgcHVibGljYXIgZW4gZm9ybWEgZWxlY3Ryw7NuaWNhIG8gZGl2dWxnYXIgcG9yIG1lZGlvIGVsZWN0csOzbmljbyBlbCB0ZXh0byBkZWwgdHJhYmFqbyBjb24gZWwgZmluIGRlIHNlciBjb25zdWx0YWRvIHBvciBlbCBww7pibGljbyBlbiBodHRwOi8vd3d3LmVhZml0LmVkdS5jby9iaWJsaW90ZWNhLiAKClRvZG8gcGVyc29uYSBxdWUgY29uc3VsdGUgeWEgc2VhIGxhIGJpYmxpb3RlY2EgbyBlbiBtZWRpbyBlbGVjdHLDs25pY28gcG9kcsOhIGNvcGlhciBhcGFydGVzIGRlbCB0ZXh0byBjaXRhbmRvIHNpZW1wcmUgbGEgZnVlbnRlcywgZXMgZGVjaXIgZWwgdGl0dWxvIGRlbCB0cmFiYWpvIHkgZWwgYXV0b3IuIEVzdGEgYXV0b3JpemFjacOzbiBubyBpbXBsaWNhIHJlbnVuY2lhIGEgbGEgZmFjdWx0YWQgcXVlIHRlbmdvIGRlIHB1YmxpY2FyIHRvdGFsIG8gcGFyY2lhbG1lbnRlCmxhIG9icmEuCgpMYSBVbml2ZXJzaWRhZCBubyBzZXLDoSByZXNwb25zYWJsZSBkZSBuaW5ndW5hIHJlY2xhbWFjacOzbiBxdWUgcHVkaWVyYSBzdXJnaXIgZGUgdGVyY2Vyb3MgcXVlIGludm9xdWVuIGF1dG9yw61hIGRlIGxhIG9icmEgcXVlIHByZXNlbnRvLgo=
dc.title.eng.fl_str_mv Are all U.S. credit unions alike?
title Are all U.S. credit unions alike?
spellingShingle Are all U.S. credit unions alike?
Credit Union
Returns to Scale
Switching Regressions
Selection
Panel
Fixed Effects
title_short Are all U.S. credit unions alike?
title_full Are all U.S. credit unions alike?
title_fullStr Are all U.S. credit unions alike?
title_full_unstemmed Are all U.S. credit unions alike?
title_sort Are all U.S. credit unions alike?
dc.creator.fl_str_mv Malikov, Emir
Restrepo, Diego A.
Kumbhakar, Subal C.
dc.contributor.author.none.fl_str_mv Malikov, Emir
Restrepo, Diego A.
Kumbhakar, Subal C.
dc.subject.keyword.eng.fl_str_mv Credit Union
Returns to Scale
Switching Regressions
Selection
Panel
Fixed Effects
topic Credit Union
Returns to Scale
Switching Regressions
Selection
Panel
Fixed Effects
description This paper raises concerns about the econometric approach used in the literature to estimate credit unions’ production technologies. We show that the existing studies did not recognize heterogeneity amongst credit unions’ technologies as captured by (endogenously selected) differing output mixes. Failure to account for the above leads to biased, inconsistent estimates and potentially misleading results. The estimates are also likely to be biased due to unobserved credit union specific effects that the literature broadly ignores. To address these concerns, we develop a generalized model of endogenous switching with polychotomous choice that is able to account for fixed effects in both the technology selection and the outcome equations. We use this model to estimate returns to scale for the U.S. retail credit unions from 1994 to 2011. Unlike recent studies, we find that not all credit unions enjoy increasing returns to scale. A nonnegligible number of large institutions operate at decreasing returns to scale, indicating that they should either cut back in size or switch to a more efficient technology by re-optimizing the output mix.
publishDate 2013
dc.date.available.none.fl_str_mv 2013-07-11T21:28:28Z
dc.date.issued.none.fl_str_mv 2013-04-11
dc.date.accessioned.none.fl_str_mv 2013-07-11T21:28:28Z
dc.type.eng.fl_str_mv workingPaper
info:eu-repo/semantics/workingPaper
dc.type.coarversion.fl_str_mv http://purl.org/coar/version/c_b1a7d7d4d402bcce
dc.type.coar.fl_str_mv http://purl.org/coar/resource_type/c_8042
dc.type.local.spa.fl_str_mv Documento de trabajo de investigación
dc.type.hasVersion.eng.fl_str_mv draft
dc.identifier.uri.none.fl_str_mv http://hdl.handle.net/10784/999
dc.identifier.jel.none.fl_str_mv C33
C34
G21
url http://hdl.handle.net/10784/999
identifier_str_mv C33
C34
G21
dc.language.iso.eng.fl_str_mv eng
language eng
dc.rights.coar.fl_str_mv http://purl.org/coar/access_right/c_abf2
dc.rights.local.spa.fl_str_mv Acceso abierto
rights_invalid_str_mv Acceso abierto
http://purl.org/coar/access_right/c_abf2
dc.coverage.spatial.eng.fl_str_mv Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees
dc.publisher.spa.fl_str_mv Universidad EAFIT
dc.publisher.department.spa.fl_str_mv Escuela de Economía y Finanzas
institution Universidad EAFIT
bitstream.url.fl_str_mv https://repository.eafit.edu.co/bitstreams/41534476-66ee-4e02-9e29-e1b657f796a3/download
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repository.name.fl_str_mv Repositorio Institucional Universidad EAFIT
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