Date of Award

Summer 8-6-2021

Degree Type

Dissertation

Degree Name

Ph.D.

Degree Program

Financial Economics

Department

Economics and Finance

Major Professor

Mohammad Kabir Hassan

Second Advisor

Luca Pezzo

Third Advisor

Walter Lane

Fourth Advisor

Gregory Price

Abstract

First essay examines if mergers lead to more efficient credit unions. We use a two-step methodology of estimating efficiency scores (technical and scale efficiencies) one year before the merger and three years after the merger through using the Data Envelopment Analysis (DEA). We find that members of acquired US credit unions benefit from improving both technical and scale efficiencies. Conversely, members of acquiring US credit unions do not benefit as the efficiency scores have been unchanged. Therefore, profitability is the primary driver of mergers for the acquiring credit unions, while efficiency is the main one for the acquired credit unions. These results are robust under different assumptions and models. Finally, CAMEL ratios and credit union size are the most important characteristics of a successful merger. In addition, second examines whether mergers improve the productivity of the US credit unions and improve efficiency by decreasing the inefficiencies (slacks) of the input and output factors for the period 2007-2019. First, we estimate the Malmquist Productivity Index (MPI) of the US credit unions; results reveal that both acquired and acquiring credit unions benefit from mergers. However, acquired credit unions benefit more because of the financial synergies. On the Other hand, in terms of input and outputs slacks, acquired credit unions benefit from the merger by decreasing the slacks of two outputs (Deposite_Amount and Loan_Rate). In comparison, the acquiring credit unions benefit from the merger by reducing the slacks of two outputs (Deposite_Rate and Loan_Rate). Conversely, regarding the acquired credit unions, the merger has affected more outputs negatively than does for the acquiring credit unions; this happens by increasing the slacks of three outputs of the acquired versus slacks of one output for acquiring.

Rights

The University of New Orleans and its agents retain the non-exclusive license to archive and make accessible this dissertation or thesis in whole or in part in all forms of media, now or hereafter known. The author retains all other ownership rights to the copyright of the thesis or dissertation.

Available for download on Tuesday, August 06, 2024

Share

COinS