BANK LOYALTY, SOCIAL NETWORKS AND CRISIS

Sümeyra Atmaca, Koen Schoors and Marijn Verschelde ()

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: In this paper, we consider how the intensity and channels of the relation between social networks and bank loyalty vary according to the state of the economy. We analyze bank exit over the period 2005-2012 for over 300,000 retail clients of a commercial bank that experienced a bank run in 2008 due to a solvency risk. The unique and rich data we constructed in close collaboration with the bank enables us to distinguish different sorts of family networks from neighborhood networks, while controlling for a wide battery of client-level and branch-level characteristics and events. Using a proportional hazards model, we show the importance of family networks. In times of financial distress, family networks become even more important and retail clients take weaker, less direct social relationships into account.

Keywords: peer effects; social networks; bank exit; financial crisis; depositor discipline. (search for similar items in EconPapers)
JEL-codes: D12 G01 G21 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-10
New Economics Papers: this item is included in nep-net and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://wps-feb.ugent.be/Papers/wp_16_923.pdf (application/pdf)

Related works:
Journal Article: Bank loyalty, social networks and crisis (2020)
Working Paper: Bank loyalty, social networks and crisis (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:16/923

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