Measures Of Diversification Research Articles

Investment Management as a Mechanism for Economic Diversification in the Kingdom of Saudi Arabia: between Opportunities and Challenges – Analytical and Foresight Study 2030 Vision

Investment plays an increasing role in promoting economic diversification, and this only succeeds if it is managed effectively. Economic diversification is a crucial feature of supportable progress, as divergence improves economic steadiness and support to surge GDP and encourages organisational and long standing change not only in the budget but also in extra columns of expansion such as communal establishments and proportions. Nevertheless, there is no accord on the consequences in the literature review for the reason that of several influences, for example the employment of dissimilar variable quantity, methods, KSA countries, and time periods. Thus, this work provides detailed insight into the current and future trends and shifts of the Saudi economy. The paper conducts a measurement and analysis of the Saudi economic diversification in light of Vision 2030, the findings of which are used to develop and propose a study framework for developing a dynamic economy.

A portfolio diversification measure in the unit interval: A coherent and practical approach

AbstractIn this article, we introduce and examine the efficiency of a portfolio diversification measure. Using the recently developed coherence properties for diversification measures as well as other criteria, we show that the novel measure outperforms the most commonly used diversification measures. Although similar in shape to other measures, our measure is the only one that satisfies all nine coherence properties whilst being easily interpreted. After testing interpretability and coherence for all measures, we perform an empirical analysis divided into two main parts. In the first part, we test some common diversification measures in a Gaussian context and in the second part we consider three empirical portfolios during the COVID‐19 pandemic. We establish the efficiency of our measure in capturing the changing level of diversification in empirical portfolios. We believe these results imply a competitive advantage for our measure and make it relevant for econometricians, practitioners and decision‐makers in general in a portfolio optimisation context.

Assessing impacts of income diversification on Vietnamese household welfare using quantile regression and longitudinal data

ABSTRACT This study examines the heterogeneous and dynamic effects of income diversification on Vietnamese household welfare measured by total income and consumption expenditure. Based on a risk management perspective and prior studies, households with different income levels may have different income diversification strategies. In the analysis, we use quantile regression for both pooled and cross-sectional data across regions. The effects from Simpson’s diversity index, as the measure of income diversification, show mixed results. During the early period of study, income diversification raised the welfare of most households. However, the trend was reversed in the later period. This generates concern for low-income households and their income sources are less diversified. For higher-income households, the adverse effects are due to their focus on fewer economic activities, with wage earnings being their main source of income.

Export Diversification, Quality and Global Value Chain: A Cross-country Analysis

This paper critically examines the impact of countries’ participation and positions in Global Value Chains (GVCs) on their export diversification and quality for 43 G20 and OECD countries over the period 1990–2015. GMM dynamic panel estimation reveals that deeper GVC integration significantly influences export structures, with countries positioned downstream in the value chain exhibiting more diversified exports (overall and at the intensive margin) but have concentrated exports at the extensive margin and geographically. Conversely, upstream, more factor-based GVC activities tend to result in less diversified export portfolios. Greater GVC participation leads to a more diversified export product basket but more concentrated export destinations in terms of the Hirschman index. However, the association between export diversification and GVC participation varies across measures of diversification and country’s level of economic development. We further find that countries and sectors having larger export share in downstream of the supply chain and have a lower extent of GVC participation, export quality differentiated product. These outcomes suggest that GVC participation and position play crucial roles in shaping national export strategies and economic resilience, with downstream activities offering pathways to enhanced export diversification and quality improvement. The study contributes to the understanding of how global production fragmentation impacts the complexity and sophistication of countries’ export baskets. The outcomes provide guidance for policymakers to strategically leverage GVC engagement to foster export diversification, quality improvement and economic resilience.

Cropping Systems Diversification as an Approach to Enhancing Crop Productivity: A Review

Agricultural intensification increased crop productivity but simplified production with lower diversity of cropping systems, higher genetic uniformity, and a higher uniformity of agricultural landscapes. Associated detrimental effects on the environment and biodiversity as well as the resilience and adaptability of cropping systems to climate change are of growing concern. Crop diversification may stabilize productivity of cropping systems and reduce negative environmental impacts and loss of biodiversity, but a shared understanding of crop diversification including approaches towards a more systematic research is lacking. The current review highlights the use of Cropping Systems Diversification as an Approach to Enhancing Crop Productivity. Crop diversification can be considered as an attempt to increase the diversity of crops through, e.g. crop rotation, multiple cropping or intercropping, compared to specialized farming with the aim to improve the productivity, stability and delivery of ecosystem services. It can be one measure to develop more sustainable production systems, develop value-chains for minor crops. Crop diversification practices can include higher crop diversity, more diverse crop, mixed cropping; cultivation of grain legumes in otherwise cereal dominated systems, perennial leys or grassland and regionally adapted varieties or variety mixtures. Crop diversification and/or additional diversification measures like variation of seeding time or changing cropping patterns have the potential to lead to higher and more stable yields, increase profitability and lead to greater resilience of agro-ecosystems in the long term. These practices have the potential to make cropping systems more diverse in space, time and genetics. Through a balanced portfolio approach to agricultural sustainability, cropping system performance can be optimized in multiple dimensions, including food and biomass production, profit, energy use, pest management, and environmental impacts.

How does corporate diversification affect earnings management? A path analysis approach

We examine whether and how corporate diversification affects earnings management. We find that diversified firms exhibit lower earnings management than comparable portfolios of single-segment firms and that the magnitude of reduction in earnings management increases with greater diversification. Using path analysis, we find that diversification decreases earnings management by reducing both earnings volatility and the need for external financing and by increasing the propensity to pay dividends. Our results are robust to using different measures of diversification and earnings management and continue to hold when we account for endogeneity using both the Heckman two-stage model and propensity score matching.

The mediating effect of bank risk on the relationship between diversification strategies and discretionary loan loss provisions

Purpose This study aims to investigate the effect of income and asset diversification on earnings management using discretionary loan loss provisions (LLP) in banks, and the role of risk level in mediating this effect. Design/methodology/approach A sample of banks operating in Middle East and North Africa countries was used to test the mediation model of Baron and Kenny (1986) with different measures of diversification and risk. Findings The results show that bank income and asset diversification have unique and combined effects on earnings management. The results also support the idea that a risk-mediating effect contributes to explaining this relationship among banks. Specifically, bank diversification strategies positively affect LLP-based earnings management by increasing bank risk. This result is relevant for conventional banks. However, only a direct and positive effect of diversification strategies on LLP-based earnings management can be observed in Islamic banks, and the indirect effect is not supported. Originality/value This study extends previous research by examining the unique and combined effects of income and asset diversification strategies on earnings management in the banking sector. Specifically, it provides new evidence that diversification strategies increase LLP-based earnings management, both directly and indirectly, through bank risk.

Influence of Corporate Planning on Implementation of Tactical Decisions in the County Government of Nakuru, Kenya

The strategy-making process, which entails carrying out strategic decisions, includes tactical decision-making. In county governments, the execution of tactical decisions is susceptible to unanticipated occurrences such escalating developmental needs, shifting limitations, and erratic resource flows. The Department of Trade had allocated USD 674,000 worth of projects. However, none of them was actually carried out, according to the Auditor General's report for the financial year 2017–2018 for Nakuru County. Only two of the 47 counties in the report received an unqualified report. Failure is quite likely when decisions are not made and actions are not taken to manage the counties successfully and professionally. Since devolution began, it has come to light that many counties in Kenya perform poorly in terms of providing services despite rising pressure to do better. The goal of this study was to determine how corporate planning affects how well tactical decisions are implemented in the Kenyan County Government of Nakuru. The study adopted the descriptive research design whereby senior officers from the 10 Nakuru County government departments, heads of the 11 sub-counties, and the 55 ward managers made up the target population, which totaled 116 people, of whom 89 served as the study sample. The correlation analysis results revealed that there was a positive and a strong significant association between corporate planning and the implementation of tactical decisions (r=0.725, p=0.000<0.05). The hypothesis test results show that corporate planning statistically influences the implementation of tactical decisions (β = 0.647, ρ = 0.000< 0.05). The results imply that product diversification improves financial performance. 
 The study recommends that commercial banks involved in mergers and acquisitions since 2010 in Kenya make only minor adjustments to their existing operations as the current diversification measures have been successful.

Measures of genetic diversification in somatic tissues at bulk and single-cell resolution

Intra-tissue genetic heterogeneity is universal to both healthy and cancerous tissues. It emerges from the stochastic accumulation of somatic mutations throughout development and homeostasis. By combining population genetics theory and genomic information, genetic heterogeneity can be exploited to infer tissue organization and dynamics in vivo. However, many basic quantities, for example the dynamics of tissue-specific stem cells remain difficult to quantify precisely. Here, we show that single-cell and bulk sequencing data inform on different aspects of the underlying stochastic processes. Bulk-derived variant allele frequency spectra (VAF) show transitions from growing to constant stem cell populations with age in samples of healthy esophagus epithelium. Single-cell mutational burden distributions allow a sample size independent measure of mutation and proliferation rates. Mutation rates in adult hematopietic stem cells are higher compared to inferences during development, suggesting additional proliferation-independent effects. Furthermore, single-cell derived VAF spectra contain information on the number of tissue-specific stem cells. In hematopiesis, we find approximately 2 × 105 HSCs, if all stem cells divide symmetrically. However, the single-cell mutational burden distribution is over-dispersed compared to a model of Poisson distributed random mutations. A time-associated model of mutation accumulation with a constant rate alone cannot generate such a pattern. At least one additional source of stochasticity would be needed. Possible candidates for these processes may be occasional bursts of stem cell divisions, potentially in response to injury, or non-constant mutation rates either through environmental exposures or cell-intrinsic variation.

Measures of genetic diversification in somatic tissues at bulk and single-cell resolution.

Intra-tissue genetic heterogeneity is universal to both healthy and cancerous tissues. It emerges from the stochastic accumulation of somatic mutations throughout development and homeostasis. By combining population genetics theory and genomic information, genetic heterogeneity can be exploited to infer tissue organization and dynamics in vivo. However, many basic quantities, for example the dynamics of tissue-specific stem cells remain difficult to quantify precisely. Here, we show that single-cell and bulk sequencing data inform on different aspects of the underlying stochastic processes. Bulk-derived variant allele frequency spectra (VAF) show transitions from growing to constant stem cell populations with age in samples of healthy esophagus epithelium. Single-cell mutational burden distributions allow a sample size independent measure of mutation and proliferation rates. Mutation rates in adult hematopietic stem cells are higher compared to inferences during development, suggesting additional proliferation-independent effects. Furthermore, single-cell derived VAF spectra contain information on the number of tissue-specific stem cells. In hematopiesis, we find approximately 2 × 105 HSCs, if all stem cells divide symmetrically. However, the single-cell mutational burden distribution is over-dispersed compared to a model of Poisson distributed random mutations. A time-associated model of mutation accumulation with a constant rate alone cannot generate such a pattern. At least one additional source of stochasticity would be needed. Possible candidates for these processes may be occasional bursts of stem cell divisions, potentially in response to injury, or non-constant mutation rates either through environmental exposures or cell-intrinsic variation.

Management of the diversification of a trading company’s activities

The strategy of overcoming the crisis is still relevant for Ukraine’s economy: diversification, entering new areas of business and trade, and searching for risks and alternatives have become important tasks after the full-scale invasion in 2022 and the declaration of martial law. The purpose of this study was to investigate the features of diversification of trading activities in crisis conditions on the example of Ukraine. Using the method of statistical analysis, the most effective and popular methods of risk distribution and features of Ukrainian crisis management were identified. The study proved the effectiveness of such diversification measures as the transition of sales to online formats, the use of postal and courier delivery services, duplication of export routes in the process of developing supply chains during martial law, and the expansion of the range of private label products by retailers. Separately, statistics on the dynamics of sales of dietary supplements in Ukrainian pharmacy chains were analysed and it was proved that sales of this group of products increased during the crisis. Based on the data obtained and the conclusions, the need to tackle corruption and immediately reform the judiciary and tax systems was proved, as these are the actions expected by the Ukrainian business community. Using the modelling, a model of enterprise diversification was created. The practical significance of the study lies in the publication of systematic information on ways of diversification, which can be useful for representatives of business and the economic block of power

Management of the internal environment of the enterprise

Today, business activities of large, medium and small business entities play a significant role in our country. They contribute to the rapid structural restructuring of the economy, saturate the market with goods and services, and maximize the employment of the entire working population. However, their development in our country is hampered by the changing and unfavorable political situation, which directly affects the existence, efficiency, viability and competitiveness of each individual form of enterprise. Enterprises and organizations face important issues of preventing liquidation, complete closure or bankruptcy caused by changes in the internal environment as a result of the management entity's activities and changes in external environment factors. The main purpose of the article is to define the essence of the internal environment and its main elements and means of crisis management. The article examines the essence of the internal environment of enterprises and reveals its main components, which include goals, objectives, organizational structure, employees and technological resources. Having considered and compared the opinions of various scholars in defining the concept of the internal environment, the author has formed her interpretation of the internal environment of the enterprise. The article investigates the management of the internal environment in crisis situations of an organization's activities. In the context of instability, paying attention to the development of an enterprise in a state of crisis in the scientific literature is still an urgent issue and important for consideration. The main reasons for the emergence of a crisis at an enterprise, which have a mutual influence, are disclosed, the reasons that cause a crisis in domestic organizations are allocated, and the most important factors influencing this are identified. The article highlights important requirements that crisis management should include. Depending on the specifics of development and the state of the enterprise, crisis management can be divided into preventive, crisis and post-crisis management. The conditions for carrying out crisis management of an enterprise are allocated. Based on the analyzed information, recommendations were made on the main ways to bring the organization out of a crisis state, which can be ensuring by diversification measures, reengineering, restructuring and rehabilitation measures.

Do "MEASURES" of Bank Diversification Measure Up? 

Do "MEASURES" of Bank Diversification Measure Up? 

Диверсификация рисков в предпринимательской среде в условиях социально-экономических изменений

The article reveals the essence of the term “diversification”. The topic is very relevant today, especially in an era of constantly changing market relations and unstable economic situation in various countries. Many companies are pursuing a risk reduction policy using diversification, the essence of which is to invest in different areas to prevent loss of investment. The main advantages and disadvantages of diversification measures have been identified, and the main types of diversification have been identified.

Crop Diversification and its Determinants among Vegetable Farmers in Kotagala, Nuwara Eliya District in Sri Lanka

A sound understanding of the demographic and farming characteristics of smallholder farmers and how they stimulate their crop diversification decisions would help policymakers make appropriate measures for encouraging crop diversification. The objectives of the study are to assess the degree of crop diversification and examine in what ways the demographic and farming characteristics of smallholder vegetable farmers impact their crop diversification at Kotagala area in the Nuwara – Eliya district of Sri Lanka. Cross-sectional data were obtained from 86 randomly selected farmers who were cultivating nine vegetable crops in the Kotagala division using the structured questionnaires during the period from October to November 2019. The degree of crop diversification among vegetable farmers was measured using the Herfindahl index, which has a mean value of 0.36. It shows that there is a low degree of crop diversification and the practices in multiple crop cultivation among the farmers is very low. Results of the frequency analysis revealed that 60.5 percent of the farmers are diversifiers, while 39.5 percent of them are non - diversifiers. Further, the tobit regression model was used to examine how demographic and farming characteristics of smallholder farmers influence crop diversification and its results indicated that age squared and education negatively influenced on crop diversification at a 10 percent significance level. On the contrary, crop diversification is positively influenced by the age and size of cultivated land at a 5 percent significance level. The findings of the study will assist the decision makers in developing the best possible policies to support crop diversity, which will motivate farmers to make better choices, boost production, and improve food security in the study area.

Economic Diversification in Kuwait Macroeconomic Implications

The extraction of oil remains the single dominant economic activity in Kuwait. While it has long been understood that economic diversification is needed to support a more stable economic base and a higher standard of living, this has been challenging in Kuwait and other GCC countries. The petroleum revenues of Kuwait cannot last forever, however public and private sector industry is nearly entirely dependent on this source of revenue. Various planning and projects have been undertaken as a means of achieving some measure of economic diversification. This paper undertakes an integrative review to synthesizing the measures undertaken in Kuwait towards the aim of economic diversification and evaluation of those projects, considering current evidence and frameworks. The study found that one area where the economic future needs of Kuwait and the cultural sensibility align is in small business ownership, and this in combination with the latent and undercapitalized, well-educated labor force presents many opportunities for growth, diversification, and innovation by providing for new opportunities for Kuwaiti citizens in Kuwait.

Determinants of Export Diversification: The Case of Russian Regions

ABSTRACT The hydrocarbon sector accounts for 50% of Russian exports, leading to high commodity price volatility risks for the economy. Prior literature emphasizes the role of export diversification in development and in hedging external shocks. We investigate factors affecting regional export diversification, applying method of moments quantile regression. We devise two export diversification measures, using Theil and Herfindahl indices. Our empirical findings demonstrate that innovations spur export diversification in industrial regions, while small and medium enterprises diversify exports in industrial and non-resource regions. Natural resource extraction enforces regional exports concentration. We develop policy implications for Russian regional policymakers considering the specialization of regional economies.

Diversification measures: Mutual fund family case

This study introduces a portfolio theory motivated approach to measuring mutual fund family-level risk diversification. The average cross-fund correlation in idiosyncratic returns measures diversification of idiosyncratic risk, while the correlation of predicted returns from the multifactor model measures factor risk diversification within a fund family. We document a substantial cross-sectional variation in family-level diversification measured with our new proxies independent of the number of funds and objectives in the family. While number of objectives is a popular yet possibly misleading measure of diversification, there is a link between portfolio theory-based diversification measures and the number of objectives in a family. On average, fund families with more investment objectives are more diversified in terms of both idiosyncratic and factor risks; yet, in large families, more investment objectives are associated with increased diversification of idiosyncratic risk but decreased diversification of factor risk. Fund family diversification improves family performance during market downturns and in large families. However, fund family diversification does not significantly affect absolute or relative family size, except for the number of investment objectives, which has a negative relation to family size.

The impact of revenue diversification on profitability, capital, and risk in US banks by size

This study examines the influence of US banks’ revenue diversification on profitability, capital, and credit risk by size. By a simple decomposition of Return On Capital (ROC) I show how popular revenue diversification measures reflect both the ROC and risk-adjusted ROC. I find substantial differences between size groups concerning the impact of revenue diversification measures on: profitability, capital, and credit risk both in comparative statics and dynamically along the business cycles. Profitability, capital, and credit risk in medium size banks reflect insensitivity to these measures compared to other size groups; large and small alike. A similar ‘smile’ pattern has also been found regarding the respective pairwise conditional correlations between profitability, capital, and credit risk.

Enhancing Rural Wellbeing: Unravelling the Impact of Economic Diversification in Sarawak

This study delves into the multifaceted dynamics of economic diversification in the state of Sarawak, Malaysia, as well as the deep implications for rural wellbeing. Specifically, the aim of the study is to look into various economic diversification measures and their impact on the Iban rural community in Sri Aman, Sarawak. Sarawak, endowed with abundant natural resources and a diverse cultural legacy, has embarked on a transformative journey towards economic diversification in order to support sustainable development and enhance rural populations' livelihoods. This study used a mixed-methods approach, including surveys and in-depth interviews. It was found that the majority of households have increased their income by diversifying their sources of income by engaging in both farm and non-farm activities, such as formal and informal trading, wage labour, and remittances. The benefits of livelihood diversification can be seen in the community's decreased reliance on a single activity, the development of infrastructure, the survival of the Iban culture, and the resilience of the community.