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Does it pay to be socially responsible? Evidence from spanish retail banking sector

This paper presents a theoretical and empirical analysis of strategic competition in retail banking when some of the financial firms are non-profit organisations that invest in social activities. Banking literature about competition is fairly large, but the strategic interaction between profit maximizing and non profit maximizers has not been extensively analysed except for Purroy and Salas (1999). In this paper, a completely different approach is taken. An adaptation of Hotelling’s two stage model of spatial competition is developed to take into account consumer perceptions respect to the two different types of financial institutions. The empirical analysis confirms that consumers take into account other features different from the price, such as social contribution or closer service to make a deposit or mortgage decision. These conclusions are of interest in the debate about a firm’s social or ethical activities. It is shown that if consumers value social activities, firms can improv

Universitat de Girona. Departament d’Economia

Other contributions: Universitat de Girona. Departament d’Economia
Author: Callado Muñoz, Francisco J.
Utrero González, Natalia
Abstract: This paper presents a theoretical and empirical analysis of strategic competition in retail banking when some of the financial firms are non-profit organisations that invest in social activities. Banking literature about competition is fairly large, but the strategic interaction between profit maximizing and non profit maximizers has not been extensively analysed except for Purroy and Salas (1999). In this paper, a completely different approach is taken. An adaptation of Hotelling’s two stage model of spatial competition is developed to take into account consumer perceptions respect to the two different types of financial institutions. The empirical analysis confirms that consumers take into account other features different from the price, such as social contribution or closer service to make a deposit or mortgage decision. These conclusions are of interest in the debate about a firm’s social or ethical activities. It is shown that if consumers value social activities, firms can improv
Document access: http://hdl.handle.net/2072/14662
Language: eng
Publisher: Universitat de Girona. Departament d’Economia
Rights: Aquest document està subjecte a una llicència Creative Commons: Reconeixement – No comercial – Sense obra derivada (by-nc-nd)
Rights URI: http://creativecommons.org/licenses/by-nc-nd/3.0/deed.ca
Subject: Bancs -- Espanya
Title: Does it pay to be socially responsible? Evidence from spanish retail banking sector
Type: info:eu-repo/semantics/workingPaper
Repository: Recercat

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