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 improve their results by behaving socially responsible.
|Date of creation:||Jan 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.udg.edu/depec
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Crespi, Rafel & Garcia-Cestona, Miguel A. & Salas, Vicente, 2004. "Governance mechanisms in Spanish banks. Does ownership matter?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2311-2330, October.
- Chiappori, P.A. & Perez-Castrillo, D. & Verdier, T., 1992.
"Spatial Competition in the Banking System: Localization, Cross Subsidies and the Regulation of Deposit Rates,"
DELTA Working Papers
92-15, DELTA (Ecole normale supérieure).
- Chiappori, Pierre-Andre & Perez-Castrillo, David & Verdier, Thierry, 1995. "Spatial competition in the banking system: Localization, cross subsidies and the regulation of deposit rates," European Economic Review, Elsevier, vol. 39(5), pages 889-918, May.
- Tirole, Jean, 2001.
Econometric Society, vol. 69(1), pages 1-35, January.
- Aleix Calveras & Juan José Ganuza, 2004.
"Responsabilidad social corporativa. Una visión desde la teoría económica,"
Economics Working Papers
797, Department of Economics and Business, Universitat Pompeu Fabra.
- Aleix Calveras & Juan José Ganuza, 2004. "Responsabilidad social corporativa. Una visión desde la teoría económica," Working Papers, Research Center on Health and Economics 797, Department of Economics and Business, Universitat Pompeu Fabra.
- Giovanni Cespa & Giacinta Cestone, 2002.
"Stakeholder Activism, Managerial Entrenchment, and the Congruence of Interests between Shareholders and Stakeholders,"
UFAE and IAE Working Papers
528.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Giovanni Cespa & Giacinta Cestone, 2002. "Stakeholder activism, managerial entrenchment and the congruence of interests between shareholders and stakeholders," Economics Working Papers 634, Department of Economics and Business, Universitat Pompeu Fabra.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Manuel Arellano & Olympia Bover, 1990. "La econometría de datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 14(1), pages 3-45, January.
- Geoffrey Heal, 2005. "Corporate Social Responsibility: An Economic and Financial Framework," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 30(3), pages 387-409, July.
When requesting a correction, please mention this item's handle: RePEc:udg:wpeudg:016. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Germà Coenders)
If references are entirely missing, you can add them using this form.