Cross-selling, switching costs and imperfect competition in British banks

Zhao, Tianshu, Matthews, Kent Gerard Patrick ORCID: https://orcid.org/0000-0001-6968-3098 and Murinde, Victor 2013. Cross-selling, switching costs and imperfect competition in British banks. Journal of Banking & Finance 37 (12) , pp. 5452-5462. 10.1016/j.jbankfin.2013.03.008

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Abstract

This paper attempts to evaluate the competitiveness of British banking in the presence of cross-selling and switching costs during 1993–2008. It presents estimates of a model of banking behaviour that encompasses switching costs as well as cross-selling of loans and off-balance sheet transactions. The evidence from panel estimation of the model indicates that the consumer faced high switching costs in the loan market in the latter part of the sample period, as a result of weaker competitiveness in the loan market. Additionally, the weaker competitiveness in the loan market appears to facilitate the cross-selling behaviour of British banks, which helps explain the rapid growth of non-interest income during the last two decades.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HG Finance
Uncontrolled Keywords:	Switching costs; Cross-selling; British banks; Competitiveness
Publisher:	Elsevier
ISSN:	0378-4266
Last Modified:	01 Nov 2022 09:29
URI:	https://orca.cardiff.ac.uk/id/eprint/88122

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