 The impact of revenue diversification on profitability, capital, and risk in US banks by sizeBen Z. Schreiber The North American Journal of Economics and Finance, 2024, vol. 69, issue PA Abstract: This study examines the influence of US banks’ revenue diversification on profitability, capital, and credit risk by size. By a simple decomposition of Return On Capital (ROC) I show how popular revenue diversification measures reflect both the ROC and risk-adjusted ROC. I find substantial differences between size groups concerning the impact of revenue diversification measures on: profitability, capital, and credit risk both in comparative statics and dynamically along the business cycles. Profitability, capital, and credit risk in medium size banks reflect insensitivity to these measures compared to other size groups; large and small alike. A similar ‘smile’ pattern has also been found regarding the respective pairwise conditional correlations between profitability, capital, and credit risk. Keywords: Banks; Profitability; Capital; Equity; Risk; Revenue Diversification; Business cycles (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:69:y:2024:i:pa:s1062940823001237 DOI: 10.1016/j.najef.2023.102000 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.