Effect Of Diversification Research Articles

Effect of product diversification on purchasing decisions at Mandau Bakery Kota Duri store

effect of product diversification on purchasing decisions at Mandau Bakery Kota Duri store

The GARCH-EVT-Copula Approach to Investigating Dependence and Quantifying Risk in a Portfolio of Bitcoin and the South African Rand

This study uses a hybrid model of the exponential generalised auto-regressive conditional heteroscedasticity (eGARCH)-extreme value theory (EVT)-Gumbel copula model to investigate the dependence structure between Bitcoin and the South African Rand, and quantify the portfolio risk of an equally weighted portfolio. The Gumbel copula, an extreme value copula, is preferred due to its versatile ability to capture various tail dependence structures. To model marginals, firstly, the eGARCH(1, 1) model is fitted to the growth rate data. Secondly, a mixture model featuring the generalised Pareto distribution (GPD) and the Gaussian kernel is fitted to the standardised residuals from an eGARCH(1, 1) model. The GPD is fitted to the tails while the Gaussian kernel is used in the central parts of the data set. The Gumbel copula parameter is estimated to be α=1.007, implying that the two currencies are independent. At 90%, 95%, and 99% levels of confidence, the portfolio’s diversification effects (DE) quantities using value at risk (VaR) and expected shortfall (ES) show that there is evidence of a reduction in losses (diversification benefits) in the portfolio compared to the risk of the simple sum of single assets. These results can be used by fund managers, risk practitioners, and investors to decide on diversification strategies that reduce their risk exposure.

Intelligent manufacturing and corporate green transformation: Unraveling the mediating effects of financing constraints and knowledge diversification

Intelligent manufacturing and corporate green transformation: Unraveling the mediating effects of financing constraints and knowledge diversification

Spread Option Pricing Under Finite Liquidity Framework

This work explores a finite liquidity model to price spread options and assess the liquidity impact. We employ Kirk approximation for computing the spread option price and its delta. The latter is needed since the liquidity impact is caused by the delta hedging of a large investor. Our main contribution is a novel methodology to price spread options in this paradigm. Kirk approximation in conjunction with Monte Carlo simulations yields the spread option prices. Moreover, the antithetic and control variates variance reduction techniques improve the performance of our method. Numerical experiments reveal that the finite liquidity causes a liquidity value adjustment in option prices ranging from 0.53% to 2.81%. The effect of correlation on prices is also explored, and as expected the option price increases due to the diversification effect, but the liquidity impact decreases slightly.

Export Diversification and Economic Growth of ECOWAS Member States

Research Originality: Using the data of export diversification index which is excluded in previous studies and most the pervious only look at the relationship between ED and GDP, excluding per capita income as basics for development. Again, previous studies results are contradictory on impact of export diversification performance. Additionally, this paper provides robust empirical evidence of a positive effect of export diversification on per capita income growth.Research Objectives: This paper has the objective to examines how export diversification (ED) increase economic growth and per capita income.Research Methods: The paper achieve its objectives using, panel least technique and co-integration test are used on time series data of 1984-2022 for ECOWAS states.Empirical Results: The paper shows that the export diversification index has a significant influence on GDP growth but inverse, however, manufacturing value-added shows weak but a positive influence on the growth per capita income. Again, the paper reveals that high skewness of ECOWAS region to primary products export which could be responsible for the low growth per capita income. The finding of this is not the volume of exported products that matters, but how dynamic is exported products.Implications: The paper therefore recommends ECOWAS countries need to develop processing capability for export that comes from endogenous sufficiency.JEL Classification: C23, F10, O47, O55

Examining the Influence of Renewable Energy Consumption, Technological Innovation, and Export Diversification on Economic Growth: Empirical Insights from E-7 Nations

The present research focuses on the endogenous development theory and investigates the relationships between economic growth (dependent variable) and renewable energy consumption, technological innovation, and export diversification (independent variables) in seven emerging economies known as the E-7. Previous studies have examined these factors individually but have not explored their combined impact on the E-7 economies. Therefore, this study contributes to the existing literature on the effects of renewable energy consumption, technological advancement, and export diversification on economic development. This study analyses the dynamic connections among these variables in seven selected emerging countries: Brazil, China, Indonesia, India, Mexico, Russia, and Turkey. Panel data from 1990 to 2022 are utilised, and various methodologies, including panel cointegration, the pooled mean group–autoregressive distributed lag (PMG-ARDL) estimator, and robustness tests, such as the fully modified ordinary least square and dynamic ordinary least square tests, are employed. Empirical inferences are drawn using the Dumitrescu–Hurlin panel causality (DHC) test, and the long-run relationships among the variables are validated using the Westerlund residual cointegration tests. The results from the PMG-ARDL estimator show that renewable energy consumption, technological advancement, and export diversification have a significant and positive impact on economic expansion, confirming the validity of the endogenous growth model in the E-7 countries. The control variable of the financial sector has a positive but insignificant effect on economic growth, while trade openness has a negative and significant effect. The DHC test results indicate a neutral feedback effect of renewable energy consumption on economic growth. The findings also reveal a unidirectional causal relationship between technological innovation and economic growth. Overall, these findings provide valuable insights for economic policymakers in the E-7 countries. By removing barriers to renewable energy consumption, technological innovation, and export diversification, policymakers can promote sustainable economic development.

Depth-dependent effects of forest diversification on soil functionality and microbial community characteristics in subtropical forests

Soil microbes are critical to the maintenance of forest ecosystem function and stability. Forest diversification, such as monocultures versus mixed forests stands, can strongly influence microbial community patterns and processes, as well as their role in soil ecosystem multifunctionality, such as in subtropical forest ecosystems. However, less is known about these patterns and processes vary with soil depth. Here, we investigated the results of an eight-year forest diversification field experiment comparing the soil ecosystem multifunctionality, bacterial and fungal community assembly, and network patterns in mixed versus monoculture plantations along vertical profiles (0–80 cm depth) in a subtropical region. We found that the introduction of broadleaf trees in coniferous monocultures led to enhanced synergies between multiple functions, thus improving soil multifunctionality. The effects of mixed plantations on the functional potential in top soils were greater than in deep soils, especially for carbon degradation genes (apu, xylA, cex, and glx). Microbial community assembly in the top layer, particularly in mixed plantations, was dominated by stochastic processes, whereas deterministic were more important in the deep layer. Soil microbial network complexity and stability were higher in the top layer of mixed plantations, but in the deep layer was monoculture. Interestingly, the changes in microbial communities and multifunctionality in the top layer were mainly related to variation in nutrients, whereas those in the deep were more influenced by soil moisture. Overall, we reveal positive effects of mixed forest stands on soil microbial characteristics and functionality compared to that of monocultures. Our findings highlighted the importance of enhancing functional diversity through the promotion of tree species diversity, and managers can better develop forest management strategies to promote soil health under global change scenarios.

Rethinking diversification: Assessing the impact of energy concentration on climate change in rentier and non-rentier countries

Energy diversification, a critical strategy for environmental protection, has been surprisingly understudied in academic discourse. This paper seeks to address this gap by investigating the relationship between energy diversification and climate change in 76 countries from 1990 to 2020. We employ panel data techniques, and the system generalized method of moments (SYS-GMM) to analyze the impact of energy diversification, as measured by the Herfindahl-Hirschman Index, on CO2 emissions. Additionally, control variables such as economic growth, trade openness, foreign direct investment, information and technology adoption, natural resource rents, and urbanization are included in the model. The analysis is re-estimated for various country groupings based on income level and resource dependence (rentier vs. non-rentier). The findings reveal a significant positive association between energy concentration and CO2 emissions across all country groups, with the most pronounced impact is observed in middle-income, resource-rich economies (i.e., middle-income rentiers). The study also highlights differing effects of diversification on CO2 emissions between high-income and middle-income nations, which reflects the prevalence of non-rentier economies among high-income countries and rentier economies in middle-income countries. The causal relationship between CO2 emissions and energy diversification in different groups of countries is tested using the panel Granger causality test. The results reveal strong bidirectional causality between CO2 emissions and energy diversification in all country groups analyzed, except for middle-income rentier countries. By elucidating the multifaceted relationship between energy diversification and climate change, this study aims to provide valuable policy recommendations to advance sustainable development and environmental management.

STRATEGI DIVERSIFIKASI PORTOFOLIO: ANALISIS DAMPAK RISIKO DAN KEUNTUNGAN PADA BANK KONVENSIONAL DAN SYARIAH MILIK NEGARA DI INDONESIA

This research examines the relationship between credit portfolio diversification and the risk and return of state-owned banks (Bank BUMN) from 2019 to 2023. Using multiple linear regression analysis, it evaluates the impact of the Herfindahl Hirschman Index (HHI) on credit or financing risk (NPL and NPF) and bank returns (ROA, ROE) among state-owned banks listed on the Indonesia Stock Exchange. Control variables include bank size, loan or financing to deposit ratio (LDR and FDR), and equity to total asset ratio (ETA). The results show that credit portfolio diversification reduces credit risk in BUMN banks, suggesting that spreading credit exposures across sectors can mitigate risk. However, diversification does not significantly affect bank returns (ROA, ROE). Control variables such as bank size, LDR and FDR, and ETA show no significant impact on credit risk, ROA, or ROE. This study provides empirical evidence on the effectiveness of financing portfolio diversification in managing credit risk within state-owned banks, considering Islamic banking principles. While diversification can mitigate credit risk, its impact on profitability requires careful consideration. BUMN banks should implement robust risk assessment frameworks and strategic oversight to maximize diversification benefits while maintaining financial stability and adhering to ethical and Sharia-compliant financial practices.

Digitalization and diversification strategies for effective bank liquidity management in emerging markets

The purpose of this study is to examine the impact of income, assets, and geographic diversity on bank liquidity in the Indonesian banking sector. This study uses purposive sampling and multiple regression analysis (MRA) to investigate the impact of digital banking on bank liquidity, as measured by the loan-to-deposit ratio (LDR) and liquidity ratio. The sample used is 87 banks in Indonesia, which include state-owned banks, commercial banks, regional development banks, and Islamic banks. The key findings of this study indicate that income and asset diversification significantly affect bank liquidity, with income diversification having a negative effect on the Loan-to-Deposit Ratio (LDR). The use of digital banking simplifies the relationship between diversification strategy and liquidity, thereby improving banks' ability to manage liquidity. However, despite digital integration, asset diversification continues to show an adverse correlation with liquidity, indicating limitations in its effectiveness. The study concludes that while digital banking enhances the effect of income diversification on liquidity management, it limits its effect on asset diversification. This suggests that digital utilization is a strategic resource for increasing liquidity, although it requires focused implementation. These findings offer important insights for bank management and policymakers in formulating digital transformation plans that enhance efficient cash management and financial stability, particularly in developing countries like Indonesia. Keywords: income diversification, asset diversification, digital banking, bank liquidity, financial stability.

Diversification Effect of Gold as an Asset Class in Foreign Exchange Reserve Portfolio, Evidence from Sri Lanka

Foreign Exchange Reserves of the countries play a major role in managing exchange rate and monetary policy, particularly in emerging countries as Sri Lanka. Therefore, it is important to manage foreign exchange reserves in an open and transparent manner with clear objectives of what is going to be achieved. For a country like Sri Lanka the main objective would be the safety of the assets since it is difficult to absorb substantial risks in managing foreign exchange reserves due to relative lower size compared to its exposure to external sector of the economy. When it comes to gold as an assets class is considered to safe-haven assets due to its nature of higher return in times of crisis and inflationary periods. The objective of this study is to explore the diversification impact of gold on foreign exchange reserves in Sri Lanka for the period from 2007 to 2023. To explore the impact of diversification, correlation between gold and existing foreign exchange reserves and additional excess return per unit of risk provide with the inclusion of gold into the portfolio were used to analyze the possible diversification impact. The results showed that there is an increase in excess return with the addition of 1% to 5% of gold as a percentage of total foreign exchange reserves, while correlation of gold with existing portfolio was less than 0.5 indicating diversification impact. Further, the Sharpe ratio was also seen increasing when the gold composition in foreign exchange reserve portfolio was increased. It was found that gold can be considered as an asset class which help diversification for foreign exchange reserves of Sri Lanka, even though the same are managed in very conservatively.

Is the volatility of yields for major crops grown in Germany related to spatial diversification at county level?

Abstract Recent evidence suggests a stabilizing effect of crop diversity on agricultural production. However, different methods are used for assessing these effects and there is little systematic quantitative evidence on diversification benefits. The aim of this study was to assess the relationship between volatility of combined crop yields (denoted as standard deviation) and diversity (denoted as Shannon’s Evenness Index SEI) for standardized yield data of major crop species grown in Germany between 1977 and 2018 (winter wheat, winter barley, silage maize and winter rapeseed) at the county level. Portfolio theory was used to estimate the optimal crop area share for minimizing yield volatility. On average, results indicated a weak negative relationship between volatility and the SEI during the past decades for the case of Germany. Optimizing crop area shares for minimizing volatility reduced yield variance on average by 24 % but was associated with a decrease in SEI for most counties. This was related to the finding that the stability of individual species, i.e., barley and wheat, was more effective in reducing the volatility of combined yields than the asynchronous variation in annual yields among crops. Future studies might include an increased number of crop species and consider temporal diversification effects for a more realistic assessment of the relation between yield volatility and crop diversity and test the relationship in other regions and production conditions.

Innovation diversity, product diversity and innovation performance

Innovation diversity has the potential to enhance a firm's technological capabilities and output by facilitating the sharing of know-how across teams. However, the diversification of corporate business segments can lead to management deterioration due to agency problems, ultimately resulting in damage to firm performance and innovation output. Therefore, this paper investigates the impact of diversified innovation and multi-segment firms on innovation outcomes.We show that when a firm with multiple business segments exhibits a higher degree of innovation diversification, the positive impact of the internal knowledge spillover can mitigate resource inefficiency, resulting in higher levels of innovation performance. To address potential endogeneity concerns, we employ a quasi-natural experiment suggested by Seru (2014), and make a comparison between completed mergers and withdrawn mergers in order to examine the effects of merger-driven diversification on innovation performance. We further conduct three conditional tests, including institutional ownership, trade secrets legal protection and financial constraint. We find that the positive impact of innovation diversity and diversity of business segments on innovation performance will be more significant when firms have better corporate governance, face weaker trade secret legal protection and when firms are financially unconstrained.

Greenhouse gas emissions during the rice season are reduced by a low soil C:N ratio using different upland-paddy rotation systems

ContextUpland-paddy rotation can improve multiple-cropping index and crop yields; however, the mechanisms underlying the effects of dry-season crop diversification on rice yields and greenhouse gas (GHG) emissions under multiple rotation systems remain unclear. ObjectiveHere, we aimed to clarify the intrinsic mechanisms whereby rice yields and GHG emissions respond to the diversification of dry-season crops and lay a theoretical foundation for developing agronomic measures that can stabilize yields and reduce GHG emissions. MethodsUsing a positioning experimental site for upland-paddy rotation, we measured rice-season CH4 and N2O emissions, crop yields, GHG-emission intensity (GHGI) levels, soil physical and chemical properties in garlic–rice (GR), wheat–rice (WR) systems for 3 years (2019–2020, and 2022), and in a rapeseed–rice (RR) system for 1 year (2022). The soil microbial dynamics of the three systems were only tested in 2022. ResultsThe WR system had the highest CO2 emission equivalent (CO2-eq), with a 3-year interval value of 1898.24–16794.30 kg·ha−1, the lowest yield (8490.10–9773.46 kg·ha−1), and the highest GHGI (0.22–1.83). The GR system had the highest rice yield (9718.91–10769.75 kg ha−1), a lower CO2-eq (1588.55–12567.51 kg·ha−1), and therefore a lower GHGI (0.16–1.24). The RR system had the lowest GHGI in 2022 (benefiting from the lowest CO2-eq) and a slightly higher yield than that of the WR system. CH4 contributed to >88 % of the CO2-eq under the three systems in 2020 and 2022. The higher soil C:N ratio of the WR system stimulated methanogenic microorganisms, coupled with higher microbial biomass C levels, and ultimately increased CH4 emissions substantially. The soil C:N ratios of the GR and RR systems were significantly lower than that of the WR system because the soil total nitrogen (TN) of both systems was higher and increased CH4 emissions were avoided. The higher levels of N nutrients (TN, NO3--N, and NH4+-N) in the GR and RR systems also enhanced rice yields, with respective increases of 10.37 % and 1.22 %, compared with that of the WR system. ConclusionsThe diversified cultivation of dry-season crops in upland-paddy rotation systems affected rice yields and GHG emissions by changing the ratios of C and N. ImplicationsOur findings highlight the importance of future research involving comprehensive agronomic measures to help reduce emissions, including fertilizer management, straw management, and tillage methods.

Drought risk management in agriculture: A copula perspective on crop diversification

AbstractDrought events are a major cause of large crop yield losses with implications for food security and farmers’ incomes. Growing multiple crops simultaneously during a cropping season is a well‐known on‐farm risk management strategy to cope with these drought risks. However, the effectiveness of this crop diversification under different severity levels of drought and how this effectiveness is influenced by the crop composition is unclear. This article provides new methodological and empirical insights to assess the effectiveness of such diversification, in particular to cope with extreme drought. We apply and evaluate nested Archimedean copulas and elliptical copulas to assess simultaneous farm‐level yield losses of different cash crops in German agriculture (winter wheat, winter barley, winter rapeseed, sugar beet, and grain maize) under different drought severity levels (N = 249,756; regionally pooled farm‐level crop‐yield pairs, 1995–2019). We show that on‐farm crop diversification contributes to cope with drought risks, but its effectiveness varies considerably across regions, crop pairs, and drought severity. Our results underline that cropping system diversification alone is often not sufficient to cope with drought risks, but that the right crop combinations are needed. For example, during a severe drought (one in 20 years event), 26.4% of farmers in eastern Germany suffered simultaneous yield losses of at least 20% in winter wheat and winter barley, while 19.1% of farmers in eastern Germany suffered simultaneous yield losses of at least 20% in winter wheat and sugar beet. Farmers should therefore be encouraged to grow crops with more diverse phenological requirements throughout the year.

Contribution of agro-pastoral diversification to the livelihood outcomes of households in South Kerio Basin, Elgeyo Marakwet County, Kenya

This study assessed the nature and effects of agro-pastoral diversification, in particular diversification into horticulture, on the livelihood outcomes in the South Kerio Basin, Elgeyo Marakwet County (EMC), Kenya, a semi-arid region. The study was a cross-sectional survey design with a mixed methods approach in three locations; Keu, Kibargoi and Arror. The study targeted 8,199 households, from which a sample of 383 households was determined using the Yamane (1967) formula. Statistical Package for Social Sciences (SPSS) V22 was used to generate quantitative data in terms of frequencies, percentages and multiple regression analyses. The study established that the average household land size was 3.4 acres, whereby 33 per cent of the land and 30 per cent of annual investments were deployed to horticultural production. A greater proportion of households incorporated horticulture into agricultural production between 2017 and 2019. The majority of households experienced minimum to moderate improvements in food, income security and socio-economic wellbeing as a result of diversifying into horticulture. Diversification into horticultural production significantly influenced livelihood outcomes at the probability level of error less than 0.001. The study concluded that horticultural production was an important livelihood activity for enhancing livelihood outcomes in the basin. The study recommends that the national and county governments promote horticultural livelihoods by reviewing policies and interventions that address agro-pastoral livelihoods and incorporate local socio-economic capabilities while involving households in the intervention process.

Quick Introduction into the General Framework of Portfolio Theory

This survey offers a succinct overview of the General Framework of Portfolio Theory (GFPT), consolidating Markowitz portfolio theory, the growth optimal portfolio theory, and the theory of risk measures. Central to this framework is the use of convex analysis and duality, reflecting the concavity of reward functions and the convexity of risk measures due to diversification effects. Furthermore, practical considerations, such as managing multiple risks in bank balance sheets, have expanded the theory to encompass vector risk analysis. The goal of this survey is to provide readers with a concise tour of the GFPT’s key concepts and practical applications without delving into excessive technicalities. Instead, it directs interested readers to the comprehensive monograph of Maier-Paape, Júdice, Platen, and Zhu (2023) for detailed proofs and further exploration.

A Study on the Risks of Real Estate Investment

This paper examines the risks associated with real estate investment, leveraging Modern Portfolio Theory (MPT) introduced by Harry Markowitz and later applied to real estate by Nigel Dubben and Sarah Sayce. MPT emphasizes balancing expected returns and risk through diversification, crucial in real estate due to its low correlation with other assets and its inflation-hedging properties. Despite global economic integration increasing systemic risks, real estate remains a key asset class for risk management. The literature review highlights traditional strategies focusing on diversifying by property type and geographic location. Studies show mixed results: some suggest property type diversification yields higher returns, while others find geographic diversification more effective for risk mitigation. Chinese market studies reveal that real estate investments can provide predictable returns and act as a hedge during economic downturns. Research on Beijing and Shanghai supports the effectiveness of geographic diversification within China. Applying MPT to real estate, the paper demonstrates through case studies how investment combinations can balance risk and returns. It discusses the Efficient Frontier, CAPM, and Arbitrage Pricing Theory to illustrate the relationship between risk and return in real estate portfolios. The analysis concludes that diversification strategies, though complex, are essential for optimizing performance and mitigating risks in real estate investments.

Do Digital Adaptation, Energy Transition, Export Diversification, and Income Inequality Accelerate towards Load Capacity Factors across the Globe?

To limit global warming to 1.5 °C, it is imperative to accelerate the global energy transition. This transition is crucial for solving the climate issue and building a more sustainable future. Therefore, within the loaded capacity curve (LCC) theory framework, this study investigates the effects of digital adaptation, energy transition, export diversification, and income inequality on the load capacity factor (LCF). This study also attempts to investigate the integration effects of digital adaptation and energy transition, and digital adaptation and export diversification, on LCF. Furthermore, we explored how income inequality influences the LCF in economies. For this study, 112 countries were selected based on the data availability. Panel data from 2010 to 2021 were analyzed using the STATA software 13 application utilizing a two-step system generalized method of moments (GMM) approach. First, interestingly, our finding shows that digital adaptation and income significantly affect the LCF. An increase in income increases the LCF among the middle-income group of countries. Therefore, LCC is confirmed in this research. Surprisingly, energy transition, export diversification, and foreign direct investment negatively impact the LCF in the base model. Second, the impact of integrating digital adaptation and energy transition has a positive effect on LCF. Third, a negative correlation was observed between the interaction of export diversification and digital adaptation with the LCF. Fourth, a positive correlation was observed between the interaction of renewable energy and digital adaptation with the LCF. Finally, this study explores the impact of the energy transition, export diversification, and income inequality on the LCF with reference to the Organization of Petroleum Exporting Countries (OPEC). The result shows a negative effect between export diversification and LCF among OPECs at a 10% significance level. To improve the quality of our planet, policymakers must understand the forces causing climate change. By adopting a comprehensive perspective, the study aims to understand how these interrelated factors collaboratively influence the LCF thoroughly. Additionally, this research seeks to provide valuable insights related to energy transition, digital adaptation, and export diversification to policymakers, researchers, and stakeholders regarding possible avenues for cultivating a more joyful and sustainable global community.

Does Macroeconomic Moderate The Effect of Risk and Diversification on Financial Stability? Evidence from Islamic Commercial Bank

<em><span>Islamic banking's financial stability can improve efficiency and health and be able to withstand shocks originating from internal and external factors. This study analyzes the impact of risk, diversification, and inflation on the financial stability of Islamic banking. By using monthly time series data from 2018–2022, the analysis method used is multiple linear regression and moderate regression analysis (MRA) using the Eviews version 10 application. The results showed that the credit risk variable (NPF) has a significant negative relationship to financial stability (Z-Score). As well as the liquidity risk variable (FDR), financing diversification has a significant positive effect on the financial stability of Islamic banking (Z-Score). Macroeconomic variables (inflation) can strengthen the effect of financing diversification and weaken the effect of liquidity risk (FDR), but inflation cannot moderate the effect of credit risk (NPF) on the financial stability of Islamic banking (Z-Score). This study introduces a new theoretical approach to the conceptual relationship between variables. The findings can serve as a reference for monetary authorities in considering the impact of inflation in setting financial stability policies.</span></em>