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Title:Cross-selling, switching costs and imperfect competition in British banks PDF Logo
Authors:Zhao, Tianshu
Matthews, Kent
Murinde, Victor
Issue Date:2011
Series/Report no.:Cardiff Economics Working Papers E2011/29
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 offbalance 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:G21
L13
Document Type:Working Paper
Appears in Collections:Cardiff Economics Working Papers

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