Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study)
Alsayed, D., Amirhom, D., A.Y. Azzam, D. (2022). Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study). EKB Journal Management System, 14(2), 1-47. doi: 10.21608/masf.2022.278049
Dr. Marwa Saber Hamoda Alsayed; Dr. Gihan Adel Nagi Amirhom; Dr. Mohsen Ebied A.Y. Azzam. "Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study)". EKB Journal Management System, 14, 2, 2022, 1-47. doi: 10.21608/masf.2022.278049
Alsayed, D., Amirhom, D., A.Y. Azzam, D. (2022). 'Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study)', EKB Journal Management System, 14(2), pp. 1-47. doi: 10.21608/masf.2022.278049
Alsayed, D., Amirhom, D., A.Y. Azzam, D. Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study). EKB Journal Management System, 2022; 14(2): 1-47. doi: 10.21608/masf.2022.278049

Business Diversification and Banks’ Performance: The Moderating Role of Credit and Liquidity Risk (Empirical Study)

المجلة العلمية للدراسات والبحوث المالية والإدارية‎
Article 8, Volume 14, Issue 2, December 2022, Page 1-47  XML PDF (646.75 K)
Document Type: المقالة الأصلية
DOI: 10.21608/masf.2022.278049
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Authors
Dr. Marwa Saber Hamoda Alsayed* 1; Dr. Gihan Adel Nagi Amirhom* 2; Dr. Mohsen Ebied A.Y. Azzam* 3
1, Accounting Department, Faculty of Commerce Menoufia University
2Accounting and Auditing Department, Faculty of Commerce,Port Said University
3Accounting Department, Faculty of Commerce, Menoufia University
Abstract
The major objective of this study is to explore the moderating role of credit risk and liquidity risk on business diversification and banks’ performance relationship, i.e., investigating the interaction relationship between banks’ risks and business diversification on banks’ performance. In light of this, the study also aims to examine the impact of credit risk and liquidity risk on banks’ performance, especially in emerging countries like Egypt. Moreover, it seeks to test the effect of business diversification, through revenue diversification, asset diversification, and funding diversification, on banks’ performance. This study depends on a sample consisting of 10 banks over the period from 2012 to 2021. The findings indicate that credit risk has a negative impact on banks’ performance, whereas liquidity risk has a positive impact on banks’ performance. Also, revenue diversification and asset diversification have a positive effect on credit risk, and only asset diversification has a positive effect on liquidity risk. Furthermore, all activities of diversification have an insignificant impact on banks’ performance. The most important result is that credit risk and liquidity risk moderate business diversification and banks’ performance relationship as credit risk changes the effect from an insignificant negative impact to a significant positive effect. Also, credit risk adjusts the impact of asset diversification from an insignificant positive impact on banks’ performance to a significant positive impact. Furthermore, liquidity risk is able to convert the impact of revenue diversification on banks’ performance from an insignificant negative impact to a significant negative impact.   
Keywords
Credit risk; Liquidity risk; Revenue diversification; Asset diversification; Funding diversification; Banks’ performance; Moderating role
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