Using Spline Function to Reexamine the Operation Performance and Merger Effects of Farmers’ Credit Unions
Resource
農業與經濟, 37, 063-098
Journal
農業與經濟
Journal Issue
37
Pages
63-98
Date Issued
2006-12
Date
2006-12
Author(s)
Abstract
Many pervious researches on cost effects of financial institution adopted the Translog cost function form. Mainly focus on it’s convenient. But the
Translog cost form is a restrictive specification by itself. Different institution size should distribute over two side of a standard U-shaped quadratic average cost (AC) curve. To use Translog form to estimate scale economies and cost effects most get not only similar but inevitable results. It is sure to affect the accuracy of studies. This paper is the first one to use the more flexible Spline function to establish cost system in Taiwan. We will reexamine the operation performance and merger effects of Farmers’ Credit Unions in Taiwan. Our results showed that the AC curve of Farmers’ Credit Unions in Taiwan is similar to an M-shaped, large-sized Farmers’ Credit Unions are more outstanding in scale economies and economies of scope effects than small-sized ones. In general, whole Farmers’ Credit Unions lie in labor input-specific scale diseconomies situation, which showed the necessity of rectifying human source for internal departments. By almost merger samples that discussing all merger combination possibly in counties are reached cost saving effects. The range is within -0.865% to 33.4%. It is apparent to understand the merger effects of Farmers’ Credit Unions are influenced deeply by different counties .If we divide the samples into five size by post-merger output level, the results indicated that merger effects are outstanding with small than 50 hundred million NT dollars level and large than 150 hundred million NT dollars level. The suitable post-merger output level exceeded in 200 hundred million NT dollars, estimating to reach 26% cost saving.
Subjects
樣條函?
經營效益
合併效益
農會信用部
Spline function
Operation performance
Merger effects
Farmers’
Credit Unions
Credit Unions
Type
journal article
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