Social capital and cross-selling within financial holding companies in an emerging economy

Social capital is the goodwill available to individuals or groups from their network of relationships. It is widely believed that social capital is useful in facilitating and governing hazardous transactions. But how social capital, in the context of a financial holding company (FHC), actually facilitates cross-selling is unknown, especially in an emerging economy. This article maintains that effective cross-selling requires an FHC to first access and accumulate comprehensive and tacit customer-specific knowledge (the “where from” condition) and then share and leverage this knowledge to other applicable business opportunities (the “where to” condition). The role of social capital and embedded ties is found to be critical to this process. Finally, we argue that the major route for the effective cross-selling within an FHC is from the commercial banking division to the underwriting division. Hypotheses are tested on the transactional data collected from Taiwan, and empirical results provide broad support for our arguments.

Chih-Pin Lin (Corresponding author)Email:

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Cheng-Min Chuang   (PhD, University of Washington) is Professor of International Business at National Taiwan University. His research interests include international joint venture and cooperation, organization and coordination in multinational enterprise, knowledge transfer, and the internationalization of service industries, particularly in the contexts of Taiwan and other Asia Pacific areas. Chih-Pin Lin   (PhD, National Taiwan University) is Assistant Professor at the Department of Business Administration, Aletheia University, Taiwan. His research focuses on the strategic alliance and the management of financial institutions and manufacturing firms in Taiwan. He is also interested in knowledge management in multinational enterprises.