Call-pricing equity returns and default risks of entry mode with brand perception in retail banking

Jeng-Yan Tsai and Chuen-Ping Chang

International Review of Economics & Finance, 2012, vol. 21, issue 1, 29-41

Abstract: Our paper focuses on a pattern of bank interest margin determination with entry competition in which a bank with home brand identity extends its advantage to an imperfectly competitive target market. We show that the bank with brand perception advantage subsequently has a lower equity return with a lower default risk whereas the incumbent facing such a threat has the opposite results. We argue that strategy on bank branding can be recognized as a high market share and low return-risk entry strategy under the geographic deregulation of retail banking.

Keywords: Bank brand perception; Entry competition; Interest margin; Default risk (search for similar items in EconPapers)
JEL-codes: G11 G13 G21 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:21:y:2012:i:1:p:29-41

DOI: 10.1016/j.iref.2011.04.001

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