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LOAN DEFAULT RISK, RETURN ON EQUITY AND SIZE EFFECTS AND OWNERSHIP CONTROL ‐ EMPIRICAL EVIDENCE ON SAVINGS AND LOANS ASSOCIATIONS IN THE USA
Author(s) -
Bulmash Samuel B.
Publication year - 1985
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1985.tb00787.x
Subject(s) - loan , equity (law) , stock (firearms) , business , empirical evidence , economics , monetary economics , financial system , finance , mechanical engineering , philosophy , epistemology , political science , law , engineering
This study examines how size interacts with the ownership factor in determin‐ ing which intermediary is more efficient in terms of loan default risk and return on equity when Mutual and Stock Savings and Loan Associations in the USA are compared. Economies of scale in the Savings and Loan Industry in the USA are suggested. Stock associations are found to be more efficient in utiliz‐ ing those economies and outperform mutuals at each size category except for the smallest associations. These findings have important policy implications for conversions from mutual stock ownership and for chartering new associations.