The determinants of non-bank financial institution efficiency: A stochastic cost frontier approach

Worthington, Andrew C. (1998) The determinants of non-bank financial institution efficiency: A stochastic cost frontier approach. Applied Financial Economics, 8(3), pp. 279-289.

PDF (79kB)

View at publisher


A two-stage estimation procedure is employed to evaluate non-bank financial institution efficiency. In the first stage, maximum-likelihood estimates of an econometric cost function are obtained for a cross-section of one hundred and fifty Australian credit unions. The results indicate that a typical credit union’s costs in 1995 were only some seven percent above what could be considered efficient. The second stage uses limited dependent variable regression techniques to relate credit union efficiency scores to structural and institutional considerations. The results indicate that non-core commercial activities are not a significant influence on the level of cost inefficiency, though asset size, capital adequacy regulation, and branch and agency networks are. A primary influence on credit union efficiency would appear to be the industrial or community associational bond under which they were created, and to a lesser extent the state-based regulatory framework.

Impact and interest:

26 citations in Scopus
Search Google Scholar™

Citation counts are sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

Full-text downloads:

2,695 since deposited on 25 Nov 2005
483 in the past twelve months

Full-text downloads displays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.

ID Code: 2706
Item Type: Journal Article
Refereed: Yes
Keywords: Cost frontiers, credit unions, cost efficiency
DOI: 10.1080/096031098333032
ISSN: 1466-4305
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > ECONOMETRICS (140300) > Econometrics not elsewhere classified (140399)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BANKING FINANCE AND INVESTMENT (150200) > Financial Institutions (incl. Banking) (150203)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 1998 Taylor & Francis
Copyright Statement: First published in Applied Financial Economics 8(3):pp. 279-289.
Deposited On: 25 Nov 2005 00:00
Last Modified: 05 Jan 2011 13:26

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page