Effect Of Income Diversification Research Articles

The Effect of Income Diversification on Default Risk in Conventional Banking Companies in Indonesia

This study aims to identify variables that affect the risk of bankruptcy in banks listed on the Indonesia Stock Exchange. The research method includes collecting data from 36 listed banks on the Indonesia Stock Exchange over a 5-year period (2018-2022) and using the panel data regression analysis method. The addition of novelty variables in this study, namely bank size, net interest margin, and deposit to total assets that have a negative effect on bankruptcy risk, while the diversification index and gross domestic product variables have no effect on bankruptcy risk. the implication for bank managers is as a reference and consideration in implementing income diversification strategies. this research also provides information that is expected to be used as reference material and expand information and insight in developing research in the banking sector.

The effect of income diversification on growth in the Turkish banking sector

The effect of income diversification on growth in the Turkish banking sector

Determinants of Income Diversification Strategies among Smallholder Wheat Farmers in Jigawa State, Nigeria

The study assessed the determinants of income diversification strategies among smallholder wheat farmers in Jigawa State. Primary data were collected from 255 smallholder wheat farmers in the study area selected using multi stage sampling procedure. The collected data were analysed using Logit regression, Simpson Diversification Index (SDI) and two stage least square regression analyses. The result revealed that non-farm income and number of income sources had significant positive relationship with income diversification. The two stage least square estimation with respect to Herfindahl Diversification Index (HDI) showed that age and years of education had positive significant relationship. The two stage least square estimation with respect to number of income share revealed that the number of income sources, age, farm size, frequency of extension contacts and years of education had significant positive relationship with per capita income. The major constraints to wheat production were limited production inputs (seed), pest and disease, low output price, lack of credit and timely preparation. Similarly, the effect of income diversification with reference to off farm income share showed that off farm income share, age and years of education had positive significant relationship. The study concluded that off farm income share and number of income sources were the most important determinants of income diversification and the major challenge to wheat production were limited access to right inputs, pest and diseases and low output prices. Thus, the study recommended that improving performance of determinants of diversification and linking farmers to better production and output markets as well as enlightening the farmers about pests and diseases control measures will improve the wellbeing of the farmers.

The Effects of Income Diversification on Market Power in the Iranian Banking System

The Effects of Income Diversification on Market Power in the Iranian Banking System

Effects of Income Diversification and Financial Performance of Kenyan Commercial Banks.

This paper aims at examining the impact of income diversification on financial performance. The motivating factor is an occasion by raising pursuance of interest activities and fluctuations of profitability among banks due to the declining interest income and stiff competition. Design/methodology/approach – This study uses a sample of 31 Kenyan banks and data for the period 2008-2019. Data is analyzed through fixed-effect regression analysis. Findings – The study finds that income diversification improves bank profitability. The findings are attributable to an increase in non-interest income and possible risk diversification. Moreover, the study controls for several banking sector-specific factors that affect financial performance. The results show bank size, age, loan portfolio quality, lending strategy, and market share have a significant effect. Research implications – Based on the results, the study recommends that bank managers should consider engaging in non-traditional activities that generate non-interest income to compensate for deteriorating interest income and to boost performance. In addition, the study recommends that bank regulators should relax rules that limit the extent to which banks can engage in non-interest earning activities

Effect of income diversification on the financial performance of quoted manufacturing firms in Nigeria

Corporate diversification is a center of research in strategic management and finance. Many firms are experiencing a decline in their traditional activities' dues to environmental challenges, including competition, inadequate infrastructural facilities, and economic instability. The study examines the effect of income diversification on the financial performance of quoted manufacturing firms in Nigeria. Specifically, it determines the impact of product income segment diversification and non-product income segment diversification on quoted manufacturing firms' financial performance in Nigerian. The study adopted an ex-post facto research design using secondary data of 42 firms from the 63 quoted manufacturing firms in Nigeria for 11 years (2007-2017) period. Structural equation modeling (SEM) is utilized for data analysis. The study found that both product income segment diversification and non-product income segment diversification significantly affect the financial performance (ROA and ROCE variables) of quoted manufacturing firms in Nigeria. The study concluded that quoted manufacturing firms' financial performance in Nigeria is significantly affected by product income segment diversification and non-product income diversification. The study recommended that manufacturing firms should strategically diversified to increase their income generation in both the product segment and non-product segment to improve their financial performance.

Effect of income diversification on the livelihood of rural farming households in Kwara State, Nigeria

Effect of income diversification on the livelihood of rural farming households in Kwara State, Nigeria

Effect of Income Diversification on Risk-Adjusted Profitability of Commercial and Development Banks in Nepal

This study analyses the impact of income diversification on risk adjusted profitability of commercial and development banks in Nepal. Risk adjusted profitability is measured in terms of risk adjusted return on assets (RAROA) and risk adjusted return on equity (RAROE). The regression analysis shows Herfindahl Hirschman Index (HHI), equity multiplier, non-interest income and foreign holding have significant positive impact on RAROE of commercial banks. Whereas the size of commercial banks has a significant negative impact on RAROE. There is a significant positive impact of HHI, non-interest income on RAROA in case of commercial banks. Size of commercial banks also has a significant negative impact on RAROA. Debt ratio does not have significant impact in case of RAROE of commercial banks and equity multiplier, debt ratio and foreign holding do not have significant impact on RAROA of commercial banks. The regression analysis of development banks showed there is significant positive impact of HHI and equity multiplier on RAROE of development banks. The study concludes that income diversification, non-interest income and size of the commercial banks are the major determinants of risk adjusted profitability of commercial banks.

The Political Economy Dynamics of Rural Household Income Diversification: A Review of the International Literature

This paper presents a summary of the international literature published on the thematic area of the political economy analysis of income diversification related to the activities of rural households with emphasis on the importance of these activities in economic growth, poverty reduction and sustainable development over time. The review provides information about the overall effect of income diversification on economic welfare of rural householders. Typically, a positive relationship exists between income diversification activities and economic welfare indicators such as income, wealth, consumption and nutrition. However, recent empirical literature evidence shows that income diversification could also increase income inequality and contribute to marginalization of certain groups of people. For example, there is evidence to indicate that in some parts of the world that relatively few better-off rural householders with sufficient capital inputs achieve higher levels of income diversification from multiple sources of income portfolios partly due to increased support services from State and community sources. The benefits of income diversification have not been fully realized by many poor rural households largely due to capital constraints, weak links to the political power structures, and conflicts that adversely affect these households. Overall, income diversification can be an important poverty-reducing strategy if its use as a policy strategy is continuously examined and assessed in terms of its political economy dimensions with regards to productivity, equity and sustainability of rural livelihood activities with particular attention paid to vulnerable and marginalized groups.

The Effect of Income Diversification on Bank Risk: Evidence from Vietnam

This study examines the effect of income diversification on bank risk in Vietnam over the period of 2006 to 2014. Our findings suggest that commercial banks that have shifted to non-interest income activities tend to face greater risk. This somewhat conflicts what has been suggested by diversification strategy in terms of risk reduction. Our results demonstrate that Vietnamese banks should focus on traditional lending activities, especially for small banks in Vietnam, given that diversification may add more risk for individual banks and banking system as a whole.

Reassessment of Diversification Effects in U.S. Bank Holding Companies: Aquantile Regression Approach

Heterogeneous patterns of the diversification effects are identified across the full distributions of various risk-adjusted performance measures and over time using a quantile regression of U.S. bank holding company data for the period 2000-2010. The net effect of income diversification is determined by a positive indirect effect from a diversified income structure and a negative direct effect from an increased share of non-interest income. The first main empirical finding shows a greater discount in the upper quantiles of the performance distributions. Second, the net diversification effect changes from a discount to a premium over time. These findings suggest that the diversification discount reflects a loss of comparative advantage at the early adjustment stage of income diversification. However, after the costly adjustment, the diversification benefit becomes dominant and the net effect becomes a diversification premium.

Determinants and effects of income diversification amongst farm households in Burkina Faso

Using four years of household data from three agroecological zones in Burkina Faso ‐ Sahelian, Sudanian, and Guinean ‐ the article examines the determinants and effects of household income diversification. Harvest shortfalls and terms of trade are found to drive diversification, but land constraints do not. Income diversification is associated with higher incomes and food consumption, and more stable income and consumption over years.

Income Effects on Undernutrition

Income Effects on Undernutrition

Rural Nonfarm Employment in Developing Countries

Discussions of rural development policy are for the most part focused on the tenurial, institutional, technical, infrastructural, and economic aspects of agricultural development. In contrast, nonfarm activities in agricultural regions receive little attention, and a number of models of agrarian economies with nonfarm activities have even predicted a decline of such activities with agricultural development.' In this paper we show that nonfarm activities in agricultural regions expand quite rapidly in response to agricultural development and merit special attention in the design of rural-and also of urban-development strategies. The poorest groups of the world's rural population include those who depend on nonfarm activities as a source of employment and income. Nonfarm activities also supply a range of goods and services to agriculture and the rural population, contributing to the growth of agricultural output and the improvement in living conditions in rural areas. Finally, the concentration and growth of nonfarm activities in rural towns localizes employment opportunities for people who leave agriculture and acts to stimulate a degree of decentralization of urban growth.