THE CONSOLIDATION OF THE FINANCIAL SERVICES INDUSTRY
The Impact of Mergers on Credit Union Service Provision
Harold O. Fried
C. A. Knox Lovell
During the past decade approximately 500 mergers involving two or more credit unions have been consummated each year. In this paper we conduct an empirical exercise in which attempt to provide answers to three questions: (i) do members of acquiring credit unions benefit from mergers?; (ii) do members of acquired credit unions benefit from mergers?, and (iii) what are the characteristics of relatively successful, and relatively unsuccessful, mergers? Our empirical exercise is based on annual samples of nearly 6,000 credit unions including nearly 300 merger partners, during the 1988-1995 period. We compare the member service performance of acquiring and acquired credit unions, both prior to merger and following merger, for as many years in each case as the time period allows. We find member service provision to have improved in acquired credit unions, and to have been unchanged in acquiring credit unions, following mergers involving over 1,600 credit unions during the period.
Keywords: mergers, credit unions
JEL Codes: G21, G34
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