Does bank diversification heterogeneously affect performance and risk-taking in ASEAN emerging economies?
Badar Nadeem Ashraf,
Anupam Das Gupta and
Research in International Business and Finance, 2018, vol. 46, issue C, 342-362
In this study, we contribute to the ongoing debate on the costs and benefits of bank diversification. Diversification may benefit banks if diversified activities are inherently less risky or yield a high return, while it may hurt banks if diversified activities are more dangerous or possess low return. Using bank-level data from Indonesia, Malaysia, the Philippines, Thailand, and Vietnam over the period 2011–2015, we find that overall banks benefit from diversification; that is, the diversified banks have higher performance and lower risk. However, we further observe that diversified activities heterogeneously benefit banks. While the revenue diversification has a robust positive impact on bank performance and stability, the effect of assets diversification varies from country-to-country. Our results imply that banks can prioritize activities for diversification to maximize the benefits.
Keywords: Income diversification; Assets diversification; Performance; Risk; Emerging economies; ASEAN (search for similar items in EconPapers)
JEL-codes: C2 G11 G21 G28 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:46:y:2018:i:c:p:342-362
Access Statistics for this article
Research in International Business and Finance is currently edited by T. Lagoarde Segot
More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().