REVENUE DIVERSIFICATION AND BANKING RISK: DOES THE STATE OWNERSHIP MATTER? EVIDENCE FROM AN EMERGING MARKET

Giang Thi Huong Vuong () and Manh Huu Nguyen
Additional contact information
Giang Thi Huong Vuong: Department of Accounting, TNU - University of Economics and Business Administration, Thai Nguyen, Vietnam
Manh Huu Nguyen: Department of Accounting and Finance, Nha Trang University, Nha Trang, Vietnam

Annals of Financial Economics (AFE), 2020, vol. 15, issue 04, 1-18

Abstract: Our paper investigates the influence of state ownership on the linkage between revenue diversification and risk of Vietnam domestic commercial banks in the period 2009–2018. By using the Generalized Method of Moments (GMM) estimation for a dynamic panel model, the empirical results indicate that Vietnamese domestic commercial banks with higher state equity are promoted to take more risks in the revenue diversification process. Our findings are robustly checked by a variety of measures of banking risk, income diversification, and state equity. Empirical results from our dynamic model are not only accordant with the previous findings of Batten and Vo [(2016). Bank risk shifting and diversification in an emerging market. Risk Management, 18(4), 217–235] estimated by Ordinary Least Square (OLS) regression on the positive relationship between banking risk and income diversification in Vietnamese domestic commercial banks but also provide new evidence on the tradeoff relationship between risk-return in the operating strategy of Vietnamese state-owned banks in the post-financial crisis. This paper proposes a framework for evaluating the nexus between revenue diversification and risk from the state ownership aspect in other frontier markets.

Keywords: Emerging market; banking risk; revenue diversification; state ownership; generalized method of moments (GMM) (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2010495220500190
Access to full text is restricted to subscribers

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:wsi:afexxx:v:15:y:2020:i:04:n:s2010495220500190

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2010495220500190

Access Statistics for this article

Annals of Financial Economics (AFE) is currently edited by Michael McAleer

More articles in Annals of Financial Economics (AFE) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().