Do the diversification of income and assets spur bank profitability in Bangladesh? A dynamic panel data analysis
Purpose – This paper aims to explore the effects of bank diversification (i.e. diversification of income and diversification of assets) on Bangladeshi banks’ profitability. Design/methodology/approach – Using a dynamic panel data model with system generalized methods of moments, the authors examine...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Emerald Publishing
2022-07-01
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| Series: | Vilakshan (XIMB Journal of Management) |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/XJM-01-2021-0023/full/pdf |
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| Summary: | Purpose – This paper aims to explore the effects of bank diversification (i.e. diversification of income and diversification of assets) on Bangladeshi banks’ profitability. Design/methodology/approach – Using a dynamic panel data model with system generalized methods of moments, the authors examine an unbalanced panel data from 32 banks spanning 318 bank-year observations from 2007 to 2016. Findings – The findings indicate a significant positive association of income diversification and asset diversification on bank profitability. Therefore, the results show that banks can generate profit from diversification of income and diversification of assets. Originality/value – One of the rare attempts to investigate the relationship between diversification and profitability in Bangladesh’s banking sector is this report. The authors anticipate the results to have major consequences for Bangladeshi bank regulators and other related economies. |
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| ISSN: | 0973-1954 2633-9439 |