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

  • Tsai, Jeng-Yan
  • Chang, Chuen-Ping
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    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.

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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 21 (2012)
    Issue (Month): 1 ()
    Pages: 29-41

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    Handle: RePEc:eee:reveco:v:21:y:2012:i:1:p:29-41
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