The Effect of Operational Risk, Credit Risk And Revenue Diversification on Profitability

This study aims to determine the effect of Operational Risk, Credit Risk and Income Diversification on Profitability in banking companies listed on the IDX for the 2016-2020 period.The analytical method used is Panel Data Regression analysis. The results obtained from this study: i) Operational Risk has a positive and significant effect on profitability in banking companies listed on the IDX for the 2016-2020 period. ii) Credit Risk has a negative and significant effect on profitability in banking companies listed on the IDX for the 2016-2020 period. iii) Income Diversification has a negative and significant effect on profitability in banking companies listed on the IDX for the 2016-2020 period. iv) Operational Risk, Credit Risk and Diversification have a positive and significant simultaneously positive and significant effect on Profitability in Banking companies listed on the IDX for the 2016-2020 period.

Resilience in Vulnerable Small and New Social Enterprises

The use of financial ratios in predicting financial vulnerability has a large body of literature, but few studies address resilience and the recovery from financial distress. Further, no vulnerability studies specifically address the needs of small and young social enterprises. This study uses over twenty years of panel data to predict which factors signal the future recovery of small and young social enterprises. There is mixed support for hypotheses found in the literature, and though additional equity and revenue diversification is shown to be beneficial, increased surplus ratios carry implications which vary between financial stressors. Even in a sample of small organizations, we find evidence for the liability of smallness. Implications for practitioners, researchers, and policymakers are discussed.

The effect of revenue diversification on the firm value and stability of banks: A comparative study of Nigerian and Malaysian banks

This study contributes to the current debate on the downsides and benefits of revenue diversification. Diversification may affect banks when they invest in riskier activities with lower returns, while they benefit from diversified activities that are less risky but have higher returns. The study offers extended implications in the empirical literature using a different measure of revenue diversification from an emerging market perspective. The study uses recent financial data from 26 Malaysian and Nigerian banks for the period 2009–2017, totaling 234 observations. The GMM estimation technique is employed to test the relationship. The results show that revenue diversification – non-interest income/gross revenue ratio (NII), fee and commission income/revenue ratio (NII1), and non-interest income/total assets ratio (NIITA) – significantly affect the firm value and stability of Nigerian banks. Liquidity, administrative expenses, net interest margin (NIM), non-performing loans (NPL), size, GDP growth rate and inflation also affect the firm value and stability of a bank. For Malaysian banks, diversification variables do not significantly affect firm value of a bank, while liquidity, administrative expenses, NIM and size significantly affect firm value. Diversification (NII and NIITA), liquidity, administrative expenses, NIM, NPL, size, GDP growth and inflation rate has a significant impact on the stability of Malaysian banks. The study concludes that revenue diversification affects both the firm value and stability of banks, and to achieve sound financial stability, banks that focus on interest-generating activities may diversify into non-interest-generating activities.

Revenue diversification and financial sustainability of microfinance institutions

PurposeThis paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).Design/methodology/approachThe study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.FindingsThe study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.Practical implicationsThe findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidiesOriginality/valueUnlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.

Revenue diversification as a strategic response by Canada’s nonprofit sector

Government policies in Canada have taken a “hard right turn” and tax cuts now have priority over investing in social programming. Both federal and provincial governments have been withdrawing from direct service provision with the expectation that the nonprofit sector will fill in the gap. At the same time, traditional government support for the sector has declined, which limits organizations’ ability to meet their current service demands. Using a sample of 645 organizations from across Canada, this paper explores the use of revenue diversification as a response to policy changes. The findings indicate that while nonprofit organizations in Canada have embraced revenue diversification to support program delivery, the extent of diversification is influenced by size, whether the organization is run by women or not, whether it is a relatively new organization or one with a long history and track record, and whether its mandate has a broad or narrow appeal. Keywords: CVSS, Centre for Voluntary Sector Studies, Working Paper Series,TRSM, Ted Rogers School of Management Citation:

Revenue diversification as a strategic response by Canada’s nonprofit sector

Government policies in Canada have taken a “hard right turn” and tax cuts now have priority over investing in social programming. Both federal and provincial governments have been withdrawing from direct service provision with the expectation that the nonprofit sector will fill in the gap. At the same time, traditional government support for the sector has declined, which limits organizations’ ability to meet their current service demands. Using a sample of 645 organizations from across Canada, this paper explores the use of revenue diversification as a response to policy changes. The findings indicate that while nonprofit organizations in Canada have embraced revenue diversification to support program delivery, the extent of diversification is influenced by size, whether the organization is run by women or not, whether it is a relatively new organization or one with a long history and track record, and whether its mandate has a broad or narrow appeal. Keywords: CVSS, Centre for Voluntary Sector Studies, Working Paper Series,TRSM, Ted Rogers School of Management Citation: