Efficiencies of Small Financial Cooperatives in Japan: Comparison of Estimation Methods


This study investigates the efficiency of Japanese credit cooperatives using a stochastic directional distance function approach and compares the results obtained from a slack-based data envelopment analysis model (SBM). Moreover, it focuses on the differences in the four groups classified by a type of common bond in a membership and considers the validity of small financial cooperatives. The findings reveal that ethnic minority-owned cooperatives that experienced a drastic consolidation in the last two decades are more efficient than the other groups and those owned through an industry-based membership are less efficient. Although the results slightly differ among alternative measures, this paper emphasizes the potential merger effects of small financial cooperatives in Japan.


Efficiency, Cooperative financial institutions, Consolidation

JEL Classification

C67, G21, G34


College of Business Administration, Ritsumeikan University

Faculty of Business Administration, Aichi University

Nobuyoshi YAMORI
Research Institute for Economics and Business Administration,
Kobe University
E-mail: yamori@rieb.kobe-u.ac.jp