Cross-selling, switching costs and imperfect competition in British banks

Tianshu Zhao, Kent Matthews, Victor Murinde

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


This paper attempts to evaluate the competitiveness of British banking in the presence of cross-selling and switching costs during 1993–2008. It presents estimates of a model of banking behaviour that encompasses switching costs as well as cross-selling of loans and off-balance sheet transactions. The evidence from panel estimation of the model indicates that the consumer faced high switching costs in the loan market in the latter part of the sample period, as a result of weaker competitiveness in the loan market. Additionally, the weaker competitiveness in the loan market appears to facilitate the cross-selling behaviour of British banks, which helps explain the rapid growth of non-interest income during the last two decades.
Original languageEnglish
Pages (from-to)5452-5462
JournalJournal of Banking & Finance
Issue number12
Early online date26 Mar 2013
Publication statusPublished - Dec 2013


  • Switching costs
  • Cross-selling
  • British banks
  • Competitiveness


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