Achieving Financial Sustainability through Revenue Diversification: A Green Pathway for Financial Institutions in Asia

Zhikang Xie, Xinglin Liu, Hina Najam, Qinghua Fu, Jawad Abbas, Ubaldo Comite, Laura Mariana Cismas and Andra Miculescu
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Zhikang Xie: School of Public Administration, Zhongnan University of Economics and Law, Wuhan 430073, China
Xinglin Liu: School of Public Administration, Zhongnan University of Economics and Law, Wuhan 430073, China
Hina Najam: Department of Business Administration, Iqra University, Islamabad 44090, Pakistan
Qinghua Fu: Department of Business Administration, Moutai Institute, Renhuai 564507, China
Jawad Abbas: Faculty of Management Sciences, University of Central Punjab, Lahore 54590, Pakistan
Ubaldo Comite: Department of Business Sciences, University Giustino Fortunato, 82100 Benevento, Italy
Laura Mariana Cismas: Faculty of Economics and Business Administration, West University of Timisoara, 300006 Timisoara, Romania
Andra Miculescu: Faculty of Economics and Business Administration, West University of Timisoara, 300006 Timisoara, Romania
Authors registered in the RePEc Author Service: Laura-Mariana Cismaș

Sustainability, 2022, vol. 14, issue 6, 1-16

Abstract: Establishing balanced and sustainable development is critical for improving banks’ capability and performance. Financial development has enormous significance in an environment of increasingly contestable international markets, and can be achieved by enhancing banking efficiency and performance. The bank efficiency is estimated through data envelopment analysis (DEA). By applying the quantile regression technique, this research examines the impact of revenue diversification (RD) on the bank efficiency (BE) of seven Asian emerging economies over 2008–2019. In this regard, non-performing loans (NPLs), non-interest income, capitalization, and gross domestic product (GDP) are taken as control variables. The empirical findings indicate that RD, market capitalization, non-interest income, and GDP have a significant positive impact on BE, whereas NPLs have a significant negative relationship with BE. These results have significant strategic implications for managers, regulators, and policymakers, who share a common interest in boosting financial sustainability and performance.

Keywords: sustainable development; bank efficiency; revenue diversification; quantile regression; data envelopment analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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