Income diversification and bank performance nexus: Does corruption matter?

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE Journal of Multinational Financial Management Pub Date : 2022-09-01 DOI:10.1016/j.mulfin.2022.100757

Bismark Addai , Wenjin Tang , Adjei Gyamfi Gyimah , Martinson Ankrah Twumasi

{"title":"Income diversification and bank performance nexus: Does corruption matter?","authors":"Bismark Addai , Wenjin Tang , Adjei Gyamfi Gyimah , Martinson Ankrah Twumasi","doi":"10.1016/j.mulfin.2022.100757","DOIUrl":null,"url":null,"abstract":"<div><p>This study examines the impact of income diversification and corruption on banks’ performance. In particular, we focus on the impact of the extent of corruption in a country on the relationship between banks’ income diversification and performance. We utilize annual data on 715 banks from 52 countries in Africa over a period of eight years, 2011–2018. The results reveal that income diversification enhances banks' profit and risk-adjusted profit. On the other hand, corruption significantly reduces bank performance. We find that the positive impact of income diversification on performance is undermined in countries with a high level of corruption. We also examine the effect of corruption on the diversification–performance nexus across bank ownership groups using subsamples of local, regional African, and non-African banks. We find that corruption affects especially the operation of local and regional African banks, and affects less the operation of non-African banks. Our findings have essential implications for the regulation of banks and financial stability in general in African countries.</p></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":"65 ","pages":"Article 100757"},"PeriodicalIF":2.9000,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Multinational Financial Management","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1042444X22000287","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 2

Abstract

This study examines the impact of income diversification and corruption on banks’ performance. In particular, we focus on the impact of the extent of corruption in a country on the relationship between banks’ income diversification and performance. We utilize annual data on 715 banks from 52 countries in Africa over a period of eight years, 2011–2018. The results reveal that income diversification enhances banks' profit and risk-adjusted profit. On the other hand, corruption significantly reduces bank performance. We find that the positive impact of income diversification on performance is undermined in countries with a high level of corruption. We also examine the effect of corruption on the diversification–performance nexus across bank ownership groups using subsamples of local, regional African, and non-African banks. We find that corruption affects especially the operation of local and regional African banks, and affects less the operation of non-African banks. Our findings have essential implications for the regulation of banks and financial stability in general in African countries.

查看原文

微信好友朋友圈 QQ好友复制链接

本刊更多论文

收入多元化与银行绩效关系:腐败是否重要?

本研究考察了收入多元化和腐败对银行绩效的影响。我们特别关注一个国家的腐败程度对银行收入多样化与绩效之间关系的影响。我们利用了2011-2018年8年间非洲52个国家715家银行的年度数据。结果表明，收入多元化提高了银行的利润和风险调整利润。另一方面，腐败会显著降低银行绩效。我们发现，在腐败程度高的国家，收入多样化对绩效的积极影响被削弱了。我们还使用本地、区域非洲和非非洲银行的子样本，研究了腐败对银行所有权群体多元化-绩效关系的影响。我们发现，腐败对非洲地方和区域银行的影响尤其大，而对非非洲银行的影响较小。我们的研究结果对非洲国家的银行监管和总体金融稳定具有重要意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文去求助

来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.

期刊最新文献

Does China’s social credit system construction promote foreign bank expansion? Directors appointed by non-state shareholders and stock price synchronicity: Evidence from Chinese SOEs Editorial Board Sectoral responses to economic policy uncertainty and geopolitical risk in the US stock market Do cultural differences affect the share price puzzle?