Perceived quality, sacrifice and value : an empirical study of clients of foreign banks and local banks in China

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Perceived quality, sacrifice and value : an empirical study of clients of foreign banks and local banks in China

 

Author: Liu, Jun
Title: Perceived quality, sacrifice and value : an empirical study of clients of foreign banks and local banks in China
Degree: D.B.A.
Year: 2003
Subject: Hong Kong Polytechnic University -- Dissertations
Banks and banking -- China
Banks and banking, International -- China
Department: Graduate School of Business
Pages: x, 191 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1733104
URI: http://theses.lib.polyu.edu.hk/handle/200/233
Abstract: Upon the WTO entry, China's banking sector now is gradually emphasizing more on financial service quality and value. The market economy reform as an internal force, and foreign banks' competition as an external force, propel the Chinese banks to address customers' perception on service value and its related antecedents in a bid to gain customers' recognition and achieve financial performance. The driving forces converge together and urge the Chinese banks towards customer orientation, which enables them to be financially sound and economically competitive. By reviewing service and bank marketing literature, customer perceived value on financial services stands out as one of major determinants of purchase and repurchase decision. In understanding service value, its antecedents such as perceived service quality, sacrifice and corporate reputation, and the correlations between them are surely worth a deep and thorough study. In China's transitional commercial banking sector facing up to foreign competition, identifying the correlations of perceived quality, sacrifice, corporate reputation and service value is of great significance since the related attributes of service value have been tested crucial in determining financial service organizations' success. The cross-sectional hypothesis testing was conducted on two subsamples , one for clients of foreign banks, and one for clients of local Chinese banks. The overall sample was run the same tests to show the combined effects. Besides the direct relationship between corporate reputation and service value, whether sacrifice mediating its influence through corporate reputation towards value perception was also tested. To fit into China's unique banking environment, the prudently selected new contents such as cross-selling advantage, service variety and government-related and management-related risk factors were added to the original scales of core service in perceived quality and risks in sacrifice. After the confirmation of scales reliability,the hypothesis testing showed a positive and significant correlation between perceived quality and service value, a negative but insignificant correlation between sacrifice and perceived value, and a positive correlation with a mixed statistical significance between corporate reputation and service value on two subsamples and on overall sample. A full mediating effect of corporate reputation between sacrifice and value was nearly proven with certain level of statistical insignificance. Meanwhile, there were no dramatic different perceptions on core service and significantly different perceptions on sacrifice by foreign banks' clients and local banks' clients. The structured telephone interview with the banking experts also provided some key yardsticks on service value enhancement issues, in particular demonstrating the importance of universal banking concept with lesser government intervention in China's financial sector. Comparison methodology used in studying service value issues in China's transitional banking industry makes a special contribution to bank marketing theoretically and pragmatically in the face of international banks' competition. The special items embedded into the existing scales representing China's unique characteristics enrich construct measurement. The mediation effect of corporate reputation definitely demonstrates a whole new angle in viewing the correlation between sacrifice and perceived value, and the differentiation of perception structures of core service and sacrifice between foreign banks' clients and local Chinese banks' clients also presents special perspectives on the relationships of service value and its antecedents. The thesis further implies what the Chinese bankers should focus on to improve client's value perception through core service enhancement, image building and risk management. Academically, bank marketing research within China's special setting, needs to go beyond service value itself, and trace down to the roots to incorporate agency cost and ownership structure issues. Relating to the sampling method, the research limitations of doubtful generalizabiltiy, among others, are also illustrated.

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