{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,10,27]],"date-time":"2025-10-27T10:50:29Z","timestamp":1761562229363},"reference-count":54,"publisher":"Wiley","issue":"7","license":[{"start":{"date-parts":[[2017,4,21]],"date-time":"2017-04-21T00:00:00Z","timestamp":1492732800000},"content-version":"vor","delay-in-days":0,"URL":"http:\/\/onlinelibrary.wiley.com\/termsAndConditions#vor"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["J of Applied Econometrics"],"published-print":{"date-parts":[[2017,11]]},"abstract":"<jats:title>Summary<\/jats:title><jats:p>Significant scale economies have been recently cited to rationalize a dramatic growth in the US retail credit union sector over the past few decades. In this paper, we explore another plausible supply\u2010side explanation for the growth of the industry, namely economies of diversification. We focus on the fact that credit unions differ among themselves in the range of financial services they offer to their members. Since larger credit unions tend to offer a more diversified financial service menu than credit unions of a smaller size, the incentive to grow in size may be fueled not only by present scale economies but also by economies of diversification. This paper provides the first robust estimates of such economies of diversification for the credit union sector. We estimate a flexible semiparametric smooth coefficient quantile panel data model with correlated effects that is capable of accommodating a four\u2010way heterogeneity among credit unions. Our results indicate the presence of non\u2010negligible economies of diversification in the industry. We find that as many as 27\u201391% (depending on the type and the cost quantile) of diversified credit unions enjoy substantial economies of diversification; the cost of most remaining credit unions is invariant to the scope of services. We also find overwhelming evidence of increasing returns to scale in the industry.<\/jats:p>","DOI":"10.1002\/jae.2569","type":"journal-article","created":{"date-parts":[[2017,4,21]],"date-time":"2017-04-21T05:19:10Z","timestamp":1492751950000},"page":"1329-1347","source":"Crossref","is-referenced-by-count":12,"title":["Economies of diversification in the US credit union sector"],"prefix":"10.1002","volume":"32","author":[{"given":"Emir","family":"Malikov","sequence":"first","affiliation":[{"name":"Department of Agricultural Economics and Rural Sociology Auburn University Auburn, AL USA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Shunan","family":"Zhao","sequence":"additional","affiliation":[{"name":"Department of Economics State University of New York at Binghamton Binghamton, NY USA"},{"name":"Department of Economics Centre College Danville, KY USA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Subal C.","family":"Kumbhakar","sequence":"additional","affiliation":[{"name":"Department of Economics State University of New York at Binghamton Binghamton, NY USA"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"311","published-online":{"date-parts":[[2017,4,21]]},"reference":[{"key":"e_1_2_8_2_1","doi-asserted-by":"publisher","DOI":"10.1198\/073500107000000269"},{"key":"e_1_2_8_3_1","doi-asserted-by":"publisher","DOI":"10.1145\/355616.361024"},{"key":"e_1_2_8_4_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jbankfin.2009.06.004"},{"key":"e_1_2_8_5_1","volume-title":"Contestable Markets and the Theory of Industry Structure","author":"Baumol W.","year":"1982"},{"key":"e_1_2_8_6_1","doi-asserted-by":"publisher","DOI":"10.1016\/0304-3932(87)90039-0"},{"key":"e_1_2_8_7_1","series-title":"(Working paper)","volume-title":"Quantile panel data models with partially varying coefficients: Estimating the growth effect of FDI","author":"Cai Z.","year":"2013"},{"key":"e_1_2_8_8_1","doi-asserted-by":"publisher","DOI":"10.1080\/01621459.2000.10474280"},{"key":"e_1_2_8_9_1","doi-asserted-by":"publisher","DOI":"10.1108\/S0731-9053(2009)0000025018"},{"key":"e_1_2_8_10_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jeconom.2011.09.025"},{"key":"e_1_2_8_11_1","doi-asserted-by":"publisher","DOI":"10.1198\/016214508000000977"},{"key":"e_1_2_8_12_1","doi-asserted-by":"publisher","DOI":"10.2307\/2297110"},{"key":"e_1_2_8_13_1","volume-title":"Credit Union Report Year\u2010End 2013","author":"CUNA","year":"2013"},{"key":"e_1_2_8_14_1","first-page":"41","article-title":"Credit unions and the common bond","volume":"81","author":"Emmons W. 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