The determinants and profitability of switching costs in Chinese banking

Wei Yin, Kent Matthews

Research output: Journal PublicationArticlepeer-review

14 Citations (Scopus)

Abstract

This article models the determinants of bank switching costs in China in terms of bank characteristics and non-bank variables. It also determines the contribution of switching costs to banks’ profits. Using a sample of 151 banks over the period 2003–2013 it reports a positive relationship between bank profitability and switching costs. The main result is that bank size measured by total assets has a complex relationship with switching costs. Competition between small banks creates the incentive for lock-in and increased switching costs whereas very large banks are less exercised by lock-in and switching costs.

Original languageEnglish
Pages (from-to)4156-4166
Number of pages11
JournalApplied Economics
Volume48
Issue number43
DOIs
Publication statusPublished - 13 Sep 2016
Externally publishedYes

Keywords

  • Chinese banking
  • bank profitability
  • switching costs

ASJC Scopus subject areas

  • Economics and Econometrics

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