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1 – 10 of over 2000
Article
Publication date: 8 July 2019

Apriani Dorkas Rambu Atahau and Tom Cronje

The purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship…

Abstract

Purpose

The purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship between concentration and returns.

Design/methodology/approach

This research uses heuristic measures of concentration: The Hirschman–Herfindahl index and Deviation from Aggregated Averages are applied to Indonesian banks across all sectors. The data covers the pre and post global financial crises periods from 2003-2011 for 109 commercial banks in Indonesia. Panel feasible generalised least squares analysis was applied.

Findings

The findings show that loan concentration increases bank returns. The positive effect of concentration on returns tends to be more significant for domestic-owned banks. In addition, the interaction effect shows that the positive effect of concentration on returns is less for foreign-owned banks.

Research limitations/implications

The Indonesian central bank changes to the reporting format of sectoral loan allocation by banks since 2012 in terms of the Indonesian Banking Statistics Details of Enhancement matrix requires separate data analysis for 2012 onwards. The findings of this paper could be enhanced by more detailed data like interest rate expenses and bank level sectoral non-performing loans data.

Practical implications

The findings suggest that a focus strategy provides better returns. Moreover, bank ownership types is an important factor to consider when setting a bank lending policy.

Originality/value

This paper is among the few studies where different measures of loan concentration in combination with measures of return are applied in Indonesia as an emerging Asian country. The research also provides evidence of the impact of concentration on the interest earnings of the loan portfolios of banks in addition to return on assets and return on equity that are generally applied as measures of return in previous research.

Details

Journal of Asia Business Studies, vol. 13 no. 3
Type: Research Article
ISSN: 1558-7894

Keywords

Book part
Publication date: 13 June 2023

Enas Moustafa Mohamed Abousafi, Mohamed Abouelhassan Ali and Jose Louis Iparraguirre

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory…

Abstract

This chapter applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory factor of the productivity performance of local private sector firms. Applying structural equation models, the geographic concentration of sectoral economic activity is found to have a positive and statistically significant effect on labor productivity. The transmission mechanism is conjectured to be the positive spillovers that are created, which local firms can tap into. In contrast, a higher concentration of skilled workers in an industrial sector in a region is associated with lower levels of labor productivity – a finding that suggests there may be structural deficiencies in the allocation of skilled workers. Regional policy should focus on net investments in gross capital formation throughout the country, for which the national and regional governments should improve how public investments are managed and the institutional framework – including the rule of law, bureaucracy and red tape, conflict of interest, transparency, and governance – so that private investment (both local and foreign) may substantially increase.

Details

Industry Clusters and Innovation in the Arab World
Type: Book
ISBN: 978-1-80262-872-2

Keywords

Article
Publication date: 13 November 2017

Lydia Dzidzor Adzobu, Elipkimi Komla Agbloyor and Anthony Aboagye

The purpose of this paper is to test whether diversification of credit portfolios across economic sectors leads to improved profitability and reduced credit risks for Ghanaian…

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Abstract

Purpose

The purpose of this paper is to test whether diversification of credit portfolios across economic sectors leads to improved profitability and reduced credit risks for Ghanaian banks that have been characterized by high non-performing loans in recent times (IMF, 2011).

Design/methodology/approach

Static and dynamic estimations, namely Prais-Winsten, fixed and random effect estimators, feasible generalized least squares as well as the system generalized methods of moments are employed on the annual data of 30 Ghanaian banks that operated between 2007 and 2014 to determine the effect of loan portfolio diversification on bank performance.

Findings

The study shows that loan portfolio diversification does not improve banks’ profitability nor does it reduce banks’ credit risks.

Research limitations/implications

The study focuses on a single banking system in Africa largely as a result of data limitation.

Practical implications

The study emphasizes the need for banks to perform a careful assessment of the effects of their lending policies geared toward increased sectoral diversification on their monitoring efficiency and effectiveness. A further investment in loan screening and monitoring is necessary to minimize credit risks.

Originality/value

This study is the first to present empirical evidence on the effects of loan portfolio diversification on bank performance in an emerging banking market in Africa.

Details

Managerial Finance, vol. 43 no. 11
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 3 April 2009

Yun Schüler‐Zhou and Margot Schüller

The purpose of this paper is to offer a critical perspective on China's official outward foreign direct investment (OFDI) data, commonly used in most research on the…

4829

Abstract

Purpose

The purpose of this paper is to offer a critical perspective on China's official outward foreign direct investment (OFDI) data, commonly used in most research on the internationalization of Chinese companies. Owing to the deficiencies of China's statistical system, official OFDI data leave us with only a limited understanding of the pattern of Chinese OFDI in general and cross‐border mergers and acquisitions (M&As) in particular.

Design/methodology/approach

Based on a theoretical discussion of the internationalization of companies, some propositions about the development pattern of Chinese M&As are derived. This study uses the Dealogic database, which covers Chinese cross‐border M&As during the period from January 1999 to May 2007 in order to analyse the development trend, geographical destination, sectoral distribution, and equity participation of Chinese cross‐border M&As.

Findings

First, the growth of China's OFDI has not been as fast as expected, while the development of cross‐border M&As has been very impressive. Second, although official OFDI statistics reveal that Asia remains the most important investment destination, our M&A data analysis shows that the developed countries in the West have attracted most Chinese cross‐border M&A investments. Third, in contrast to the official OFDI statistics, our findings reveal a heavy concentration of M&As in mining and manufacturing. Finally, our cross‐border M&A data suggest that Chinese companies predominantly seek high‐level equity participation in the acquired target companies abroad.

Originality/value

This paper fills a gap in the study of the development pattern of Chinese cross‐border M&A investments and offers a complementary view and a better understanding of the internationalization of Chinese companies.

Details

Chinese Management Studies, vol. 3 no. 1
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 13 March 2024

Hassan Akram and Adnan Hushmat

Keeping in view the robust growth of Islamic banking around the globe, this study aims to comparatively analyze the association between liquidity creation and liquidity risk for…

Abstract

Purpose

Keeping in view the robust growth of Islamic banking around the globe, this study aims to comparatively analyze the association between liquidity creation and liquidity risk for Islamic banks (IBANs) and conventional banks (CBANs) in Pakistan and Malaysia over a period of 2004–2021. The moderating role of bank loan concentration on the aforementioned relationship is also studied.

Design/methodology/approach

Regression estimation methods such as fixed effect, random effect and generalized least square are deployed for obtaining results. Liquidity creation Burger Bouwman measure (cat fat and noncat fat) and Basel-III liquidity risk measure (liquidity coverage ratio) are also used.

Findings

The results give us insight that liquidity creation is positively and significantly related to liquidity risk in both IBANs and CBANs of Pakistan and Malaysia. This relationship has been moderated negatively (reversed) and significantly by credit concentration showing the importance of risk management and loan portfolio concentration.

Practical implications

It is analyzed that during the process of liquidity creation, IBANs in Pakistan faced more liquidity risk for both on and off-balance sheet transactions in the presence of moderation of loan concentration than IBANs in Malaysia necessitating strategic policy-making for important aspects of liquidity risk management and loan concentration while creating liquidity.

Originality/value

Such studies comparing IBANs and CBANs comparison keeping in view liquidity creation, liquidity risk and loan concentration are either limited or nonexistent.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 1 August 2004

Alfredo Martinez Bobillo, Miguel A. Fernández Temprano and Fernando Tejerina Gaite

This study develops a systematic analysis of the concentration and inequality levels of 20 Spanish industries over the period 1990‐2001. The methodology traced is based on the use…

Abstract

This study develops a systematic analysis of the concentration and inequality levels of 20 Spanish industries over the period 1990‐2001. The methodology traced is based on the use of indices both for evaluating the inequality (Gini,MRD&Coefficient of Variation), and for studying the concentration (Herfindahl‐Hirchman, Theil & Hannah‐Kay). This article adopts a dynamic approach, through the Distributional Change Index. The analysis confirms the different behaviour within the durable and non‐durable goods groups of Spain’s industries. Significant differences also appear with respect to the characterisation of the sectors. These characteristics are centred on the intensity of capital and skill, the capacity for technological development and the intensive use of agricultural inputs. Another of the most relevant conclusions is that referring to the increase competition of certain industries in Spain, particularly those belonging to the non‐durable goods group.

Details

Management Research News, vol. 27 no. 8/9
Type: Research Article
ISSN: 0140-9174

Keywords

Book part
Publication date: 23 May 2023

Ramesh Chandra Das

Recalling that the introductory chapter (Chapter 1) wanted to carry out similar types of analysis for the major states in India. Thus, the present chapter tries to examine the…

Abstract

Recalling that the introductory chapter (Chapter 1) wanted to carry out similar types of analysis for the major states in India. Thus, the present chapter tries to examine the trends of a bank branch, deposit, credit, the credit–deposit ratio, sectoral shares of credit, magnitudes of banking transactions, credit concentration, etc., for the selected 15 states and Delhi as the only union territory for the period 1972–2019. The study period covers the pre-reform period from 1972 to 1992 and the post-reform period 1993–2019. The observations show that the branch, deposit and credit did not grow significantly during the post-reform period. As a result, the credit–deposit ratio did not increase significantly during the reform period. But, the magnitude of banking transactions increased in most of the states during the reform period. Regarding the sector-wise share of credit, AP, Maharashtra, UP and TN are the leading states in agricultural credit, WB, Gujarat and Maharashtra are in industrial credit and Kerala, Assam and Delhi are in the service sector. On the other hand, the study finds rising magnitudes credit concentrations of the states during the post-reform period in contrast to the declining concentration in the pre-reform period. Maharashtra is the state which holds around 25 per cent of all states’ credit throughout the entire period of 1972–2019. Hence, there are the notions of rising disparity and inequality in credit as well as incomes of the states and all India levels.

Details

Growth and Developmental Aspects of Credit Allocation: An inquiry for Leading Countries and the Indian States
Type: Book
ISBN: 978-1-80382-612-7

Keywords

Book part
Publication date: 19 April 2017

Katalin Szemeredi

This paper provides a primer on European multinational business groups (BGs) and their subsidiaries. Firms in these BGs appear to have higher sales performance than firms in…

Abstract

This paper provides a primer on European multinational business groups (BGs) and their subsidiaries. Firms in these BGs appear to have higher sales performance than firms in domestic groups (15% higher). This leads us to investigate which elements increase the likelihood that a group will transition towards multinational status. BGs’ characteristics matter for foreign acquisition: groups becoming multinational are usually larger, have a more hierarchical structure with respect to the number of layers in a group, and are more diverse in terms of sectors. Groups tend to expand into bordering countries or countries providing particular advantages, such as a large internal market. The first acquisition is a corporate-level decision that appears to be made by the group’s controlling firm and is often a diversification into a different industry.

Article
Publication date: 27 June 2019

Abhinav Kumar Rajverma, Arun Kumar Misra, Sabyasachi Mohapatra and Abhijeet Chandra

The purpose of this paper is to examine the influence of ownership structure and dividend payouts over firm’s profitability, valuation and idiosyncratic risk. The authors further…

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Abstract

Purpose

The purpose of this paper is to examine the influence of ownership structure and dividend payouts over firm’s profitability, valuation and idiosyncratic risk. The authors further investigate if corporate performance is sector dependent.

Design/methodology/approach

The study employs signaling and bankruptcy theories to evaluate the influence of ownership structure and dividend payout over a firm’s corporate performance. The authors use a panel regression approach to measure the performance of family owned firms against that of widely held firms.

Findings

The study confines to firms operating out of emerging markets. The results show that family owned firms are dominant with concentrated ownership. The management pays lower dividend leading to lower valuation and higher idiosyncratic risk. The study further illustrates that family ownership concentration and family control both influence firm performance and level of risk. The findings indicate that information asymmetry and under diversification lead to increased idiosyncratic risk, resulting in the erosion of firm’s value. Results also confirm that firms paying regular dividends are less risky and, hence, command a valuation premium.

Originality/value

The evidence supports the proposition that information asymmetry plays a significant role in explaining dividend payouts pattern and related impacts on corporate performance. The originality of the paper lies in factoring idiosyncratic risk while explaining profitability and related valuation among emerging market firms.

Details

Managerial Finance, vol. 45 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 February 2002

Giles Barrett, Trevor Jones, David McEvoy and Chris McGoldrick

Immigrant‐owned business in Britain is reviewed in the light of both cultural and structural economic perspectives. The latter view is emphasised. Concentration in trades which…

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Abstract

Immigrant‐owned business in Britain is reviewed in the light of both cultural and structural economic perspectives. The latter view is emphasised. Concentration in trades which are in decline, or are labour intensive, or both, creates acute competitive pressures which are exacerbated by the growing presence of corporate rivals in many markets. Real and perceived bias on the part of banks helps to limit diversification. Attempts to move away from characteristic activities, both geographically and sectorally, have had only limited impact. Accumulation of class resources holds the greatest promise for entrepreneurial success.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 8 no. 1/2
Type: Research Article
ISSN: 1355-2554

Keywords

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