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Satisfaction Drivers in Retail Banking: Comparison of Partial Least Squares and Covariance Based Methods

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  • Monika Oleksiak

    (Warsaw School of Economics)

Abstract

The primary goal of the study is to diagnose satisfaction and loyalty drivers in Polish retail banking sector. The problem is approached with Customer Satisfaction Index (CSI) models, which were developed for national satisfaction studies in the United States and European countries. These are multiequation path models with latent variables. The data come from a survey on Poles' usage and attitude towards retail banks, conducted quarterly on a representative sample. The model used in the study is a compromise between author's synthesis of national CSI models and the data constraints. There are two approaches to the estimation of the CSI models: Partial Least Squares - used in national satisfaction studies and Covariance Based Methods (SEM, Lisrel). A discussion is held on which of those two methods is better and in what circumstances. In this study both methods are used. Comparison of their performance is the secondary goal of the study.

Suggested Citation

  • Monika Oleksiak, 2009. "Satisfaction Drivers in Retail Banking: Comparison of Partial Least Squares and Covariance Based Methods," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 1(1), pages 83-102, March.
    • Handle: RePEc:psc:journl:v:1:y:2009:i:1:p:83-102
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    References listed on IDEAS

    as
    1. O'Loughlin, Christina & Coenders, Germà, 2002. "Application of the European Customer Satisfaction Index to Postal Services. Structural Equation Models versus Partial Least Squares," Working Papers of the Department of Economics, University of Girona 4, Department of Economics, University of Girona.
    2. TENENHAUS, Michel & CHATELIN, Yves-Marie & ESPOSITO VINZI, Vincenzo, 2002. "State-of-art on PLS Path Modeling through the available software," HEC Research Papers Series 764, HEC Paris.
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    More about this item

    Keywords

    satisfaction; loyalty; customer satisfaction index models; banking sector; structural equation models with latent variables; structural equations modeling; partial least squares; covariance based methods;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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