Pricing strategy and financial policy

Recent empirical evidence indicates that capital structure changesaffect pricing strategies. In most cases, prices increase followingthe implementation of a leveraged buyout of a major firm inan industry, with the more leveraged firm in the industry charginghigher prices on average. Notable exceptions exist, however,when the leverage increasing firm's rival is relatively unlevered.The first observation is consistent with a model where firmscompete for market share on the basis of price. The second observationcan be explained within the context of a Stackelberg model wherethe relatively unlevered rival acts as the Stackelberg priceleader.     

The new new financial thing: The origins of financial innovations

The origins of financial innovations have attracted little empirical scrutiny. Using Wall Street Journal articles as an indicator, this paper examines which institutions were the key financial innovators between 1990 and 2002. The evidence suggests that smaller firms account for a disproportionate share of the innovations. Less profitable firms innovate more, though in the years subsequent to the introduction of the innovation, the profitability of the innovators increases significantly. Finally, older, less leveraged firms located in regions with more financial innovations innovate more. While several of the determinants of patenting are similar, small and unprofitable firms do not patent disproportionately.     

我国金融超市的管理创新策略研究

一、金融超市的功能及产生背景金融超市是指银行对其经营的各种产品和服务经过有机整合,并通过与保险公司、证券公司、房地产公司、汽车经销商、大型商业机构、行政管理部门等开展业务合作,面向个人客户提供的一种涵盖众多金融产品与增值服务的一体化经营方式的金融机构。金融超市是对我国传统金融组织体系的突破,是商业银行组织体系、业务体系、产品体系以及政策体系的一种创新。1.金融超市的功能自2001年9月农业银行在全国率先开设“百家金融超市”至今,已有包括交通银行、中信实业银行及建设银行在内的多家银行发展了700多家金融超市。虽…     

International investment in financial services

This paper analyzes and models the significant components of international trade in financial services, namely, foreign direct investment in banking for the US, the UK and Germany. It distinguishes between banks' activities abroad and FDI in banking by banks and non-banks. A model for FDI in banking is proposed which contains certain explanatory variables peculiar to FDI in banking as compared to FDI in manufacturing. The components of the model of FDI in banking is different from those models designed to explain banks activities abroad. The empirical results of this study of FDI in banking indicate that bilateral trade, banks' foreign assets, the cost of capital, relative economic growth, exchange rates and FDI in non-finance industries are the major determinants of foreign investment in banking.     

Aspects of international financial services

The purpose of this paper is to discuss the issues related to international financial services, particularly foreign direct investment in banking. The paper discusses the challenges of measuring incomes generated from the activities of multinational banks, including their international lending and direct investment in host countries. The paper highlights the complementary role of FDI and trade in financial services and discusses investment in banking services. The patterns of FDI in banking in Eastern European countries, Latin America and East Asia are also analysed with a focus on the costs and benefits of FDI in banking in the emerging countries.     

E-business opportunities in financial services

Over many years, technological developments have enabled financial services products to be sold and administered via remote distribution channels. E-business is the latest channel whose potential is being explored by both traditional financial services players and new entrants alike. But, in their haste to ‘go online’, are organisations, new and old, falling into the ‘technology trap’ and ignoring the fundamentals underpinning financial services retailing and, perhaps, undermining some of their ‘segment-of-one’ strategies? This paper concludes that the key to successful e-financial services retailing is to take the nuances, attributes, techniques and skills that have accompanied financial services products in the physical world and reinvent them in an e-environment. Only by following this approach will e-business avoid being labelled as a solution looking for a problem. UK high street banks are continuing to extend the choice of channel through which customers can manage their money, eg e-banking. But it is suggested that channels such as e-banking potentially reduce the level of personal contact between bank and customer to the extent that a ‘virtual’ relationship develops. This paper concludes that, given the tendency towards ‘virtualisation’, it is inconceivable that bank–customer relationships will become any more intimate in the future. Indeed, a greater degree of personalisation in customer communication may be the very best that banks are able to offer.     

Boom and bust patterns in the adoption of financial innovations

We develop a dynamic model of the adoption of financial innovations.Each period, firms decide whether or not to adopt an innovationof uncertain value, and the profitability of each period's adoptionsreveals information about the innovations's value. We show thatcharacteristics of financial innovation waves cited by criticsas evidence of irrational excess are, in fact, consistent withfully rational behavior. We also show that social welfare isenhanced when more firms adopt innovations of questionable valueand that financial intermediaries have an incentive to encouragesuch adoption.     

Customer value analysis in financial services

This study investigates what creates value for customers and how providers can improve value for their customers. A comprehensive analytical model with a four-step approach is presented and applied in the field of financial services. In a first step, the main customer value drivers are identified and five value dimensions are derived, based on qualitative interviews with customers. These results are then compared to value assumptions made by customer-contact employees, and gaps between customer and employee perceptions are analysed. Based on these identified gaps, a multitude of implications for managing company customer value at the normative, strategic, and operational level of management are derived, and finally implications of findings for service marketing practice and research are discussed.     

Information technology and financial services consolidation

This paper examines the interaction of information technology and the current consolidation in the financial services industry. It suggests that an important reason for financial service firms to consolidate and not outsource their information technology may be to retain the strategic option to be more diversified firms that offer both financial and information services in the future.     

创新ATM金融服务平台

现代意义的ATM诞生于上世纪60年代末,至今已有约40年的历史.ATM进入我国是在1988年,中国银行在珠海安装了我国第一台ATM,至2008年,ATM在我国刚好走过了20年的发展道路.作为一个并不年轻的行业,ATM功能、运营有什么创新,未来发展趋势如何?日前,本刊记者就上述问题走访了业内专家.     

Consideration sets for financial services brands

This study examines the extent of consumer information search and consideration of financial services brands. It uses data from two surveys of purchasing behavior. This study finds a surprisingly low level of consumer consideration, either by personal enquiry or via the internet. The most common consideration set comprised only one brand, and this was the case for both high-value and low-value services. The managerial implication is that services marketers should make brand salience a top priority, with the competitiveness of their offer not being the primary driver of sales. If a financial services brand is salient to a consumer, there is a very high chance they will purchase that brand, without extensive comparison of the merits of alternatives.     

CRM in intermediated financial services markets

A division of a major UK insurance company manufactures insurance products for wholesale clients to retail into their banking and building society customer bases. This paper discusses the CRM challenges of leveraging insurance business from existing partnership relationships, including issues of confidentiality between client portfolios, the strategic use of data marts rather than data warehouses and the sharing of information. It describes the issues involved in implementing CRM, such as rolling out customer contact management and call centre systems. The study concludes with an appraisal of lessons learned, which include a better understanding of who the customers are and which of them are profitable, together with the characteristics that contribute to them becoming profitable or unprofitable.     

Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition

By studying the Hong Kong banking industry, the objective of this study is to examine the role of information complementarity and market competition in governing the diffusion of off-balance-sheet (OBS) financial innovations. Specifically, two OBS financial innovations are information complementary if the adoption of one lowers the uncertainty of adopting another. In addition, market competition may speed up the diffusion of OBS financial innovations because competitive firms are able to capture the full profit potential from successful innovations. A simultaneous equation model is devised to estimate the impacts of information complementarity, market competition, and a number of other factors on the diffusion of OBS financial innovations. Results of estimation suggest that information complementarity and market competition are the primary driving forces behind the diffusion process.     

WTO financial services commitments: Determinants and impact on financial stability

The paper investigates the factors that have influenced WTO members to take on their chosen level of liberalization commitments in the framework of liberalization of trade in financial services and the impact of such commitments on financial sector stability. The most important factors are economic growth, current account, trends in banking sector development, policy restrictiveness, and peer-group effects. The econometric evidence suggests that more liberal commitments may be associated with greater vulnerability to currency and banking crises—most likely a short-term effect, which should be mitigated with time through increased market efficiency and better resource allocation.     

An analysis of financial services brand marks

This study analyses brand mark clusters used by companies in the financial services categories of the Fortune 1000. The brand marks are assessed against the normative criteria for effective brand mark design found in the marketing literature. Despite the existence of several well-designed brand mark clusters within the sample, results show a low level of adherence to the normative criteria overall. A low proportion of the brand mark clusters exhibit symbols representative of brand benefits, integrative features such as interactive images, and benefit slogan taglines.     

Optimal introductory pricing for new financial services

Financial services institutions often provide special introductory prices to new customers who sign up for their services such as credit cards, credit monitoring services and online stock trading. Despite their prevalence, the decision to provide introductory prices to new customers entails challenges for decision makers. Providing small incentives may not perceptibly affect the adoption of the service while providing a large incentive leads to the loss of revenue and profits. As a result, the effectiveness of such activities on firm profitability remains largely unexplored. This study seeks to address this gap in the literature by exploring optimal introductory pricing of a financial service. Employing agent-based simulation experiments, we find that offering introductory discounts significantly increases a firm’s net present value (NPV) of profits. Moreover, the findings suggest the amount of discount and the duration of time that a new customer receives the discount are critical factors in determining the NPV of profits. The research and managerial implications are discussed.     

面向金融服务的开放网格服务架构

一、引言网格(Grid)技术以大规模的资源协作共享、开放性创新应用以及高性能计算等特点,区别于传统的社会息化及电子商务技术模式,被看作是网络领域继In-ernet(国际互联网:解决了计算机等设备节点间的物理通问题)和WWW(万维网:浏览器/网站体系,解决了算机间的数据访问交互问题)之后的第三次技术革命将解决业务逻辑功能、服务等的连通交互问题),必将社会信息化形态及金融电子商务服务模式产生巨大响。二、网格与OGSA如果说Internet是信息传输的基础设施,那么网格是信息处理的基础设施。随着宽带通信的高速发展,信息传输瓶颈问题得到较好…     

Earnout financing in the financial services industry

This paper explores the effects of earnout contracts used in US financial services M&A. We use propensity score matching (PSM) to address selection bias issues with regard to the endogeneity of the decision of financial institutions to use such contracts. We find that the use of earnout contracts leads to significantly higher acquirer abnormal returns (short- and long-run) compared to counterpart acquisitions (control deals) which do not use such contracts. The larger the size of the deferred (earnout) payment, as a fraction of the total transaction value, the higher the acquirers' gains in the short- and long-run. Both acquirer short- and long-run gains increase when the management team of the target institution is retained in the post-acquisition period.