Bank loyalty, social networks and crisis

Abstract

In this paper, we consider how the intensity and channels of the relation between social networks and bank loyalty vary according to the state of the economy. We analyze bank exit over the period 2005-2012 for over 300,000 retail clients of a commercial bank that experienced a bank run in 2008 due to a solvency risk. The unique and rich data we constructed in close collaboration with the bank enables us to distinguish different sorts of family networks from neighborhood networks, while controlling for a wide battery of client-level and branch-level characteristics and events. Using a proportional hazards model, we show the importance of family networks. In times of financial distress, family networks become even more important and retail clients take weaker, less direct social relationships into account.

The relationship between corporate identity and university loyalty: The moderating effect of brand identification in managing an institutional crisis

“…Thus, in a situation of institutional crisis, strong corporate identity constitutes a powerful antecedent that contributes to reducing its negative effects and improving the loyalty level of its stakeholders. These results confirm what was suggested in previous studies on the relationship between corporate identity and consumer loyalty (Atmaca et al., 2020; Ruan, 2016). It is also consistent with previous research, which states that in a crisis situation, a strong corporate identity generates a positively perceived image that leads to the propensity to acquire the products and services of that organization and to work or invest in the organization, and would therefore, cushion the negative effects of the crisis and would not reduce their loyalty (Coombs & Holladay, 2001; Gwebu et al., 2018; Helm & Tolsdorf, 2013).…”

“…This can be reflected in a loss of legitimacy by its stakeholders, and in a loss of reputation or corporate image (Gwebu et al., 2018). Thus, an organizational crisis can affect negatively the loyalty of its customers (Atmaca et al., 2020), the performance or results of the organization, which will jeopardize its profitability and survival (Coombs, 2014).…”

“…Previous research suggests that there is a relationship between corporate identity and customer loyalty (Jin et al., 2019), loyalty or identification of staff or teachers (Bravo et al., 2016; Cachón‐Rodríguez et al., 2019), in such a way that a strong brand identity can reduce the perceived negative effects of a crisis by its stakeholders (Gistri et al., 2018). Research shows that favourable management of a crisis gives an organization a competitive advantage by increasing the image (Lažetić, 2019), or reputation (Gwebu et al., 2018) of the organization for its stakeholders, which is reflected in the propensity to acquire the products and services of that organization (Atmaca et al., 2020) and to work or invest in the organization (Chen & Jai, 2019), that is in your loyalty. However, these studies do not show if an adequate management of corporate identity during an institutional crisis produces positive effects on loyalty.…”

“…Furthermore, a crisis can affect any type of institution and stakeholder (Helm & Tolsdorf, 2013; Ozanne et al., 2020; Qingchun, 2017). Most of the investigations have analysed the relationships indicated in a business context and in a type of stakeholder such as customers (Atmaca et al., 2020; Chen & Jai, 2019), and a few regarding non‐profit organizations (Ozanne et al., 2020; Schwarz & Pforr, 2011). However, charitable organizations, trade unions, or public institutions of higher education are faced with crisis situations, and although they have their own characteristics, they depend on their stakeholders´ will in order to survive, for example, through voluntary donations, sponsorship or political support.…”

Would depositors pay to show that they do not withdraw? Theory and experiment

“…Empirical studies show that depositors' choices are sometimes observable and affect subsequent depositors' decisions. Grada and Kelly (2000), Iyer and Puri (2012), Iyer et al (2016) and Atmaca et al (2017) study observability in one's social network or neighborhood: observing that others withdraw (keep their funds deposited) increases (decreases) the likelihood of withdrawal. These studies suggest also that depositors observe withdrawals more broadly than holding funds in the bank.…”