Switching costs and the extent of potential competition in Brazilian banking

Mariana O. Silva and Claudio Lucinda
Additional contact information
Mariana O. Silva: University of Sao Paulo, Brazil

Economia, 2017, vol. 17, issue 1, 117_128

Abstract: Switching costs are a leading cause of customer lock-in in banking, reducing the extent of competition and increasing market power in this industry. This paper tries to estimate these costs using a methodology that does not require customer microdata. The estimates obtained here-using bank accounting information collected on a quarterly basis from 2009 to 2011-indicate substantial switching costs in the deposit market, and such costs tend to be lower for customers of larger banks. Additionally, there is some evidence that much of a bank's market share is due to its continued relationships with customers over time (a lock-in effect). Thus, the extent of potential competition in Brazilian banking could be severely limited by these costs

Keywords: Switching costs; Banking; Industrial organization (search for similar items in EconPapers)
JEL-codes: G21 L13 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1517758016300273 (text/html)
http://ac.els-cdn.com/S1517758016301126/1-s2.0-S15 ... e20571e8bc49c204c0e4 (application/pdf)

Related works:
Working Paper: SWITCHING COSTS AND THE EXTENT OF POTENTIAL COMPETITION IN BRAZILIAN BANKING (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anp:econom:v:18:y:2017:1:117_128

Ordering information: This journal article can be ordered from
Secretaria da ANPEC Rua Prof Marcos Valdemar de Freitas Reis s/n Campus do Campus do Gragoatá, Bloco F Niterói, RJ 24210-201 Brazil
http://www.anpec.org.br/revista/

Access Statistics for this article

Economia is currently edited by Joaquim Pinto de Andrade

More articles in Economia from ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics] Secretaria da ANPEC Rua Prof Marcos Valdemar de Freitas Reis s/n Campus do Campus do Gragoatá, Bloco F Niterói, RJ 24210-201 Brazil. Contact information at EDIRC.
Bibliographic data for series maintained by Rodrigo Zadra Armond ().