Paying for Banking Services: What Determines the Fees?

Pavel Dvorak and Jan Hanousek

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economic Institute, Prague

Abstract: We analyze a unique dataset to test an empirical model of retail bank fee determinants in five Central European countries. Due to the data structure we can cope with heterogeneity and cross-subsidization by employing a representative fee index instead of using variables associated with individual fees. We find support for the Structure-Conduct-Performance hypothesis about the effect of industry concentration, the importance of differences in reliance on cashless payments, and differences in the labor intensity and technology level of bank operations. We also show that cross-country differences in retail bank fees can be explained by fundamental economic factors.

Keywords: Banking; bank fees; Central and Eastern Europe; international comparison; Structure-Conduct-Performance hypothesis. (search for similar items in EconPapers)
JEL-codes: G21 L11 G28 D41 C81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-tra
Date: 2009-08

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Persistent link: http://EconPapers.repec.org/RePEc:cer:papers:wp388

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