Revenue Diversification Research Articles

The Influences of Revenue Diversification and Incoming Tourists on the Performance of Star-Rated Hotels in China

Human capital and a transformed data set are combined into a stochastic frontier analysis to estimate the technical efficiency of star-rated hotels in 30 provinces and municipalities of China for the period of 2011–2015. The influences of revenue diversification across room, food & beverage, and other services and incoming tourists on technical efficiency, labor, and capital productivities are addressed. Hotels in Zhejiang, Shanghai and Tianjin are found to be the most efficient. For the efficiency and productivities determinants, per capita GDP of the hosting province is the primary determinant, hotel ranking and diversification in revenue sources contribute to efficiency and partial productivities, while tourists from different origins bring about diversified impacts. Hotels located in regions with more Taiwan tourists are more efficient with higher capital productivity. Tourists from Hong Kong, Macau, and foreign countries have brought about both positive and negative linkages to efficiency and partial productivities. In general, hotels can reallocate their resources to diversify their services for better efficiency and productivities. In contrast, expanding external markets cannot guarantee higher efficiency and better productivities. Hotel management should be careful in formulating their marketing strategies.

Agronomic and economic performance of organic forage, quinoa, and grain crop rotations in the Palouse region of the Pacific Northwest, USA

Volatile crop prices and a desire for sustainability have farmers considering alternative practices to increase revenue diversity and protect soil health. Organic management is rapidly expanding as an alternative to conventional agriculture, and quinoa (Chenopodium quinoa Willd.) is a potential new crop for organic systems in the Pacific Northwest. Here we tested the agronomic and economic effects of diversifying dryland crop rotations with organic quinoa in the Palouse region of the Pacific Northwest. Eight 3-year grain cropping sequences were compared based on metrics of crop productivity, crop quality, and economic performance. While the crop sequences affected these metrics, crop yields and quality were mediated primarily by weather across growing seasons. Cumulative yields were higher for crop sequences that started with chickpea compared to barley. Organic quinoa yields were lower than the yield potential for the region, but some 3-year sequences with quinoa produced similar net returns to some sequences with wheat. Mean returns over variable costs were $324ha−1 yr−1 for the 3-year sequence treatments; each treatment averaged positive net returns to variable costs despite some individual years having negative returns. The highest net returns to variable costs were in sequences that grew wheat and those that started with chickpea. Returns over total costs for the 3-year sequence treatments averaged -$33ha−1 yr−1. The organic cropping systems (the total 8-year crop rotations including 5 years of organic alfalfa) produced higher returns over variable and total costs ($615ha−1 yr−1 and $168ha−1 yr−1, respectively) than a typical conventional rotation with county average yields during the same 8-year period ($477ha−1 yr−1 and $82ha−1 yr−1). Our results show that premiums for organic alfalfa and grains make these organic cropping systems economically viable for dryland production in the Pacific Northwest. Advances in organic weed control and regionally adapted quinoa varieties would further reduce the risk for farmers attempting this cropping system diversification.

In the Shadow of State Government: Changes in Municipal Spending After Two Recessions

This research estimates a model of own-source revenue diversification and a model of changes in operational spending in municipal governments from 1997 to 2012 to determine how these governments have adapted to the two significant recessions that occurred during this time period. The first model examines factors that affect revenue diversification, focusing on the state–local fiscal context and how the level of urbanization of the area surrounding the municipalities impacts the effect of state–local context and other factors. The second model examines how municipal governments in the United States have adapted their spending to the two severe recessions of the 2000s, focusing on how state context, revenue diversification, and other factors affect changes in operational spending. Finally, this research also looks at the conditional effects of the size of government on the impact of state context, environmental pressures, and revenue structure on changes in operational spending.

Nonprofit Pricing: Determinants of Membership Fee Levels in Nonprofit Sports Clubs in Germany

Abstract: In Germany, membership fees in nonprofit sports clubs are comparatively lower than fees or prices for other leisure time activities, such as sports offers from fitness clubs, music schools, or theatre visits. However, it is unclear on which basis sports clubs set their membership fees for different groups and why fees differ between clubs. Based on panel data of nonprofit sports clubs in Germany ( n =1,538), this study investigates which factors influence the setting of membership fee levels using classical pricing-approaches adapted to the nonprofit context. The results show that costs related to coaches and instructors as well as facility costs significantly determine the level of membership fees, whereas perceived competition does not. Moreover, club goals such as offering competitive sports or sports for socially vulnerable groups have an impact on the level of membership fees. Furthermore, clubs with higher revenue diversification display lower levels of membership fees two years later.

Viable, Sustainable or Resilient?

Abstract Hyperlocal media are increasingly prominent in local media ecologies. However, economic pressures are their biggest challenge and are therefore our main thematic. The study is based on empirical data from 35 hyperlocals in Sweden, the UK, France, the Netherlands and Belgium. We present a conceptual framework of viable, sustainable and resilient models and find that hyperlocals are diversifying their revenues. Drawing on business ecosystems as a theoretical approach, we find these hyperlocals are surviving by forging symbiotic relationships with media, businesses, advertisers and communities in their environment. With its focus on imbalanced and evolving relations, the approach offers a broad framework to explain how hyperlocal business models are developing through a dynamic system of proximal interdependencies. The results contribute to new knowledge by explaining the revenue diversification of hyperlocals in the digital ecosystemic space.

Women's agricultural practices and their effects on soil nutrient content in the Nyalenda urban gardens of Kisumu, Kenya

Abstract. In Kisumu up to 60 % of the inhabitants practice some form of urban agriculture, with just under 50 % of the workers being female. On average, women spend more hours a day in the gardens than men. Therefore women's knowledge is pivotal for effective agricultural management. To enhance and better use women's knowledge, gender-related sociocultural obstacles linked to land ownership, investment, and farm inputs have to be taken into account. We aimed to determine how the agricultural knowledge and motivations of female farmers working in the Nyalenda urban gardens in Kisumu (Kenya) influence the soil nutrient status as reflected by the total soil C and N; available soil N and P; and exchangeable soil Na, K, Mg, and Ca. Two prevailing practices were compared to determine how the agricultural management practice influences soil nutrient content: (1) applying manure only and (2) applying manure while intercropping with cowpeas. Interviews and focus group discussions were held to explore the agricultural knowledge and motivations of the women working in Nyalenda. Soil analysis showed that the soil in Nyalenda was rich in nutrients overall but that the intercropped fields contained significantly lower total soil nutrients than fields where only manure was applied. While theoretically intercropping with a legume such as cowpeas should increase soil N content, due to socioeconomic factors, such as poverty, intercropping was applied in a way that did not increase soil nutrient contents; rather it diversified revenue. The knowledge of the female farmers was found to be limited to practical and sensory knowledge. This shows that when aiming to improve soil nutrient status and agricultural yields through agricultural training, socioeconomic conditions, cultural context, and gendered knowledge differentiation have to be acknowledged.

Becoming business-like: the determinants of NGOs? marketization turning into social enterprises in Poland

Research background: NGOs face an increasing expectation to be more business-like. They are becoming involved in selling services by performing a commercial activity, which, in turn, is a basic condition for creating social enterprises. The changes related to this approach are an essential condition for their survival and a significant reason for developing their new form as social enterprises. On the other hand, there is no lack of critical opinions related primarily to mission volatility. Currently, a discussion is taking place in the literature on factors that may affect NGOs? marketization; these, however, have not been empirically verified yet. The identified research gap constituted a major challenge for the author.
 Purpose of the article: The purpose of this paper is to verify whether conducting a business activity influences the entrepreneurial way of NGOs? operation, and to indicate the factors that have a significant impact on their marketization.
 Methods: On the basis of a representative national survey of 3,800 NGOs, including 412 social enterprises in Poland. a one-factor analysis of variance (ANOVA) and a stepwise backward regression analysis were carried out.
 Findings & Value added: The analysis of the results confirms that there are significant differences between NGOs operating as social enterprises and NGOs not performing a business activity. In contrast with the existing literature, this study indicates that social enterprises have less diversified revenue sources and use a more or less democratic governance model. Moreover, Polish social enterprises less frequently adjust their policy direction to donors? interests. The factors significantly affecting NGOs? marketization include action strategies for several years, activity in favor of external benefit takers, close business cooperation, lack of permanent financing sources, and regular activity combined with flexible working time.

Understanding the Dissolution of Nonprofit Organizations: A Financial Management Perspective

The financial antecedents of nonprofit dissolution have not been well studied, although there is growing scholarly attention devoted to the dissolution of nonprofit organizations. Using longitudinal data on U.S. public charities from 2005 to 2015, this study employs the Cox proportional-hazards model to examine the effects of overhead costs and revenue mix on nonprofit dissolution. In particular, we find that spending on employee compensation and fundraising each has a nonlinear, U-shaped relationship with the likelihood of nonprofit dissolution. We also find that commercial nonprofits are less likely to dissolve than their noncommercial counterparts. Finally, revenue diversification has a favorable effect on nonprofits’ survival prospects. These findings provide important managerial implications for nonprofits to sustain their operations and influence in practice.

Airport Revenue Diversification

This report emphasizes the non-aeronautical revenues of airports that are playing an increasingly important part in the revenues of airport. This report delves into different fields of non-aeronautical services that serve as an important revenue source as well as how to better manage these fields to bring greater profits and incomes for the airport. This report focuses on airport advertising, food and beverage and airport car parking as to their potential benefits and threats to the revenues of different airports. It shows that although these fields of non-aeronautical services can potentially bring in a lot of revenues and profits to the airports, different airports also need to adopt proactive policies and strategies to improve these fields to increase their revenues and competitiveness.

Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks

In the future, when the process of economic integration in the banking sector is more powerful, and competitive, diversifying revenue is an inevitable and objective trend to help the banks increase profits, minimize risks and improve their competitive position in the system. The research is on the relationship between revenue diversification, risk and bank performance using data from audited financial statements and annual reports of 26 commercial banks listed and unlisted in Vietnam during the period 2010–2018. The research method uses Generalized Method of Moment (GMM) modeling techniques to solve endogenous problems, variance and autocorrelation in the research model. Research results show that diversification negatively impacts profitability and the higher the diversification, the higher the risk of commercial banks. However, the more diversified listed banks, the more increased the bank’s stability. The banks show the weakness and lack of experience of the banking system in developing a reasonable profit transformation model. The revenue diversification of banks is currently passive and moves slowly. Interest income is still the motivation of bank development, boosting profit growth. Growth, as well as the contribution from service activities, is not commensurate with potentials; although there are many positive points, they are not enough to cover risks from net interest income activities.

The financial health of Australian universities: policy implications in a changing environment

PurposeIn the context of the Australian Government’s attempts to impose budget austerity measures on publicly funded universities in its higher education sector, the purpose of this paper is to assess the sector’s financial health.Design/methodology/approachThe multi-dimensional study is based on seven years of government financial data from all 39 publicly funded Australian universities, supplemented by information from universities’ annual reports. Using a financial health model that reflects vulnerability, viability and resilience, the authors examine sector data using a suite of metrics. The authors analyse differences between those universities in the Top 10 and Bottom 10 by revenue, as a window into the financial health of the sector at large.FindingsWhile mostly financially viable, the sector shows signs of financial vulnerability, particularly in the areas of expense control and financial sustainability. Possibly in response to an uncertain funding environment, universities are managing long-term liquidity by growing reserves. Debt represents largely untapped potential for universities, while differences between the Top 10 and Bottom 10 universities were most evident in the area of revenue diversity, a strong predictor of financial viability.Research limitations/implicationsFocussing on a specific set of financial metrics limits the scope of the study, but highlights further research possibilities. These include more detailed statistical analysis of data, financial case studies of individual universities and the implications of revenue diversification on academic standards.Originality/valueThe paper contributes to higher education literature, providing empirical evidence of universities’ finances. It highlights the importance of universities’ financial resilience in an uncertain funding environment.

Dual Effects of Internationalization and Program Diversification On Nonprofits' Revenue Diversity.

Dual Effects of Internationalization and Program Diversification On Nonprofits' Revenue Diversity.

Mission-Aligned Revenue Streams and Financial Health: The Case of Arts and Cultural Nonprofits

A large number of empirical studies have focused on the effects of revenue diversification on public and nonprofit organizations, but little attention has been paid to the components of revenue por...

Exploring the influence of revenue diversification on financial performance in the banking industry

PurposeThe purpose of this study is to review the literature related to the influence of revenue diversification on banking sector performance. Further, the determination of the scope and the empirical estimation of the revenue diversification is also the area of investigation to synthesis with future research area.Design/methodology/approachThe systemic literature review process used by Opoku et al. (2015) is applied. In total, 68 Journal articles are studied after applying specified review protocols. The information gathered from the selected articles is presented and summarized in specified tables and charts formats for easy understanding.FindingsThe comprehensive literature review showed that much of the work in this area is done in the USA and the Asian region. To explore the impact of revenue diversification on banking performance in developing countries is a literature gap. While going through the existing literature, it is clear that researchers have not reached at any conclusion about the exact impact of revenue diversification on banking performance. It is also found that non-interest income ratio and Herfindahl-Hirschman index (HHI) (revenue) index are the most common proxies of revenue diversification. However, other studies also input the HHI (loans) index, number of ATM’s and number of branches as a proxy for diversification.Research limitationsThis systematic literature review is based on specific review protocols, and therefore, it might be possible that some of the important work is not included in it due to time restrictions.Originality/valueThe banking sector has shown tremendous growth in revenue sources in past two decades. Keeping in view the importance of the banking sector within an economy, the dramatic shift of revenue sources and their impact is important to determine that eventually will help to define the future research area. In past research studies, there exists clear disagreement about the possible impact of revenue diversification on banking performance. This systemic literature review is an attempt to draw conclusions about the exact impact of revenue diversification. Therefore, the outcome of the study will be very valuable for both banking practitioners and academicians.

Impacts of Revenue Diversification and Revenue Elasticity on State Fiscal Health

Revenue diversification and elasticity of the revenue portfolio are important characteristics of a revenue structure. Using state financial data from 2007–2012, this study identifies the different impacts of revenue diversification and revenue portfolio elasticity on the fiscal health of US states. Fiscal health is measured by a comprehensive set of indicators including measures of revenue, expenditure, operating position, and debt. We find that during an economic downturn fiscal health is improved by revenue diversification but reduced by a more elastic revenue structure. Furthermore, the overall positive impact of revenue diversification outweighs the negative effect of revenue elasticity. Findings provide important guidance in designing a sound tax portfolio that generates adequate revenue while being able to withstand significant stress from business cycles.

GraceKennedy Group: The new Chief Information Officer and IT Governance

Grace Kennedy Group was the fourth largest Jamaican company listed on the Jamaican Stock Exchange by market capitalization in 2016. The company operated in several market segments focusing mainly on foods and financial services industries. Geographically, GraceKennedy Group had a diversified revenue stream operating across the Caribbean, Central and North America, Europe and Africa. Diversification had led to a diverse set of Information Technology platforms to serve the needs of the various subsidiaries of GraceKennedy Group. With the emergence of new technological trends like big data, social and cloud computing, the Group’s Audit Committee in 2014 conducted a risk profile around the company’s IT governance structure. The Committee recommended a change in the decentralized model of IT governance and the hiring of a Chief Information Officer to inter alia, strategically using IT to create value and to coordinate system security. The Chief Information Officer position was externally advertised; however, after several interviews, the Chief Executive Officer decided to offer the position to Robert Sutherland the then general manager of one of its subsidiaries. Sutherland was a former chairman of the Business Technology (BizTech) Council which was established in 2006 to oversee the delivery of IT services within the group and to provide guidance to the business leadership on enterprise-wide related matters such as the strategic use of IT. The case focuses on the issues faced by a newly promoted Chief Information Officer, in an environment in which the Chief Executive Officer has articulated the need for a new, transformative, strategic and value creating vision for IT.

Competition, efficiency and stability: An empirical study of East Asian commercial banks

This paper examines the relationships between competition, efficiency and stability in the banking systems of four East Asian countries (China, Hong Kong, Malaysia and Vietnam) over 2004–2014. The results support the traditional competition–fragility view and suggest that an increase in competition may result in a decrease in stability. Similarly, credit risk, bank size and market concentration may positively affect bank stability. By contrast, banks with higher liquidity risk and revenue diversification may become less stable. Empirical analysis suggests that banking sector stability was adversely affected by the global financial crisis. Listed banks may be less stable than their non-listed peers. The macroeconomic environment (measured in terms of inflation and GDP growth) also affects bank stability. Additionally, some important policy implications with respect to improving bank stability are recommended.

Market reaction to banks revenue diversification strategy: evidence from India

ABSTRACTThis paper examines whether revenue diversification by banks is beneficial using data from India for the period 1995–2018. We use non-interest income to total income ratio as a measure of revenue diversification, and use market measures of returns and risk to evaluate the benefits. The results indicate that a higher share of non-interest income in total income leads to a higher market return and lowers the market risk. These results broadly remain the same even when we divide the sample into public (government owned) and private banks.

Tougher than the rest? The resilience of specialized financial intermediation to macroeconomic shocks

This paper uses a unique and comprehensive dataset comprised of 41 years of detailed banking data from the German building society industry to provide empirical evidence of the resilience of specialized financial intermediation (SFI) to macroeconomic shocks. Compared to studies on the German banking industry, we show that SFI is extremely stable despite generally less diversified revenue streams. We are also able to illustrate the impact of various economic conditions and cycles on the interactions between the building society sector and macroeconomic development. We use a VAR approach to demonstrate that 1) macroeconomic and mortgage-specific market shocks have limited or no impact on the banking performance (return on equity) or distress (write-off) indicators, and 2) the results of previous studies showing that financial rewards lead to higher bank funding stability on a contractual level also hold when analyzing data on an institutional level. As much research has found, and as the recent worldwide financial crisis highlighted spectacularly, banking stability is fundamental to the overall stability of financial systems and economies as a whole. Therefore, our results contribute to the ongoing discussion of whether specialized financial intermediation can indeed lead to more stable banking systems.

Bank revenue diversification: its impact on risk and return in Brazilian banks

ABSTRACT The present study aims to determine the impact of bank revenue diversification on Brazilian banks’ risk and return. This strategy has been adopted by banks in several countries, including Brazil. In 2003, noninterest income accounted for 17.80% of the operating revenue of the banks analyzed, and in 2014, this share increased to 27.40%. While many studies have addressed the subject in American, European and Asian banks, it still has not been approached in a sample of Brazilian banks. Since the banking industry is a key variable for the financial system’s stability, it is important to study the factors that affect banks’ risk and return. We analyzed the sample for the period from 2003 to 2014, using dynamic panel data GMM (Generalized Method of Moments) to address endogeneity, heteroscedasticity and autocorrelation problems. Our main results show that noninterest income has a major role in the performance of the banks studied; our analysis of financial intermediation activities showed that loan operations produced better results than trading. Moreover, confirming the hypotheses proposed, noninterest income showed a generally positive impact on return and risk adjusted return for the banks studied. However, against our expectation, noninterest income showed a positive relationship with the risk of these banks (although not statistically significant). It is worth highlighting the control variables, i.e., real interest rate, GDP and bank growth, which were relevant in determining bank performance.