The Anatomy of Bank Diversification

Ralf Elsas, Andreas Hackethal and Markus Holzhaeuser

Discussion Papers in Business Administration from University of Munich, Munich School of Management

Abstract: We use panel data from nine countries over the period 1996 to 2003 to test how revenue diversi-fication in conjunction with increasing bank size affects bank value. Using a comprehensive framework for bank performance measurement, we find no evidence for a conglomerate discount, unlike studies concerned with industrial firms. Rather, revenue diversification increases bank profitability and is associated with higher market valuation. This performance effect does not depend on whether diversification was achieved through organic growth or through M&A activity.

Keywords: Bank diversification; organic growth; M&A (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-ban, nep-fin and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://epub.ub.uni-muenchen.de/1167/1/ehh_lmu_0906.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lmu:msmdpa:1167

Access Statistics for this paper

More papers in Discussion Papers in Business Administration from University of Munich, Munich School of Management Ludwigstr. 28,80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Mareike Seifried ( this e-mail address is bad, please contact ).