Cross-Selling, Switching Costs and Imperfect Competition in British Banks

Tianshu Zhao, Kent Matthews and Victor Murinde

No E2011/29, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

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 lends support to our theoretical priors on the cross-selling behaviour of British banks, which helps explain the rapid growth of non-interest income during the last two decades. We also find that the consumer faced high switching costs in the loan market in the latter part of the sample period, as a result of lower competitiveness.

JEL-codes: G21 L13 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-11
New Economics Papers: this item is included in nep-ban, nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Cross-selling, switching costs and imperfect competition in British banks (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2011/29

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