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How Do Banks Compete? Evidence from Advertising Videos / Xugan Chen, Allen Hu, Song Ma.
- Format:
- Book
- Author/Creator:
- Chen, Xugan.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w34220.
- NBER working paper series no. w34220
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2025.
- Summary:
- This paper studies how banks compete through a novel lens: the content of advertising videos. Using video embeddings, we identify three competitive dimensions: pricing, service quality, and trust-building emotional appeals. We build a framework connecting advertising content to franchise value and monetary policy transmission. Empirical evidence is consistent with model predictions. Banks with high local market shares compete on service and trust while downplaying pricing. New entrants compete primarily on pricing. Banks lacking pricing or service advantages lean on emotional appeals. Non-price advertising strengthens the deposit franchise, enabling banks to maintain wider spreads during monetary tightening and shaping monetary transmission.
- Notes:
- September 2025.
- Print version record
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