Abstract
The collapse of substantial numbers of large multinational banking corporations in recent years has prompted regulatory authorities to raise both disclosure and transparency requirements on banks. Banking customers have also called for additional protection against unconscionable practices, and for greater transparency and product information. The literature reveals that transparency positively influences customer behaviour. However, the mediating effect of service charge transparency on the relationship between corporate social responsibility and customer behaviour is a neglected topic. The findings in this research revealed that corporate social responsibility has a positive and significant influence on service charge transparency, customer repurchase intention and word-of-mouth intention. The results also confirmed that service charge transparency has a positive and significant influence on customer repurchase intention and word-of-mouth. Furthermore, they revealed that service charge transparency plays a mediating role in the respective relationships between corporate social responsibility and the two dimensions of consumer behaviour, customer repurchase intention and word-of-mouth intention.
Highlights
Fallout from the collapse of the Lehman Brothers prompted regulatory authorities in Hong Kong to raise both disclosure and transparency requirements for banks (Ewins, Husted, Lee and Woo, 2010)
Confirmatory factor analysis was conducted to confirm the validity of the modified questionnaire items of the two remaining variables, i.e. corporate social responsibility (CSR) and service charge transparency (SCT) (Cavana et al, 2001)
The purpose of this research was to investigate the casual relationships between perceptions of corporate behaviour, in the form of corporate social responsibility and service charge transparency, and customer behaviour, measured as customer repurchase intention and
Summary
Fallout from the collapse of the Lehman Brothers prompted regulatory authorities in Hong Kong to raise both disclosure and transparency requirements for banks (Ewins, Husted, Lee and Woo, 2010). An increasingly stringent and competitive environment is forcing retail banks to re-examine their pricing practices and disclosure policies (Gabaix and Laibson, 2006; Chiu, 2003). Transparency initiatives, especially those relating to the provision of complete product information and pricing schemes, are a first and welcome step in strengthening customer trust (Hultman and Axelsson, 2007). Hong Kong’s rapid growth is attributable to mainland China’s support, well developed legal, tax, financial and banking systems, skilful and hardworking population, and most importantly, its free market economy, international trade and finance (China Daily, 2010). There are 145 licensed banks, restricted license banks and deposit taking companies in Hong Kong, making a total of 200 authorized banking institutions, out of which 181 are owned by entities from countries (Janus Corporate Solutions, 2012)
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