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Internationalization, diversification and risk in multinational banks

Author

Listed:
  • Mohamed Azzim Gulamhussen

    (Instituto Universitario de Lisboa)

  • Carlos Pinheiro

    (Caixa Geral de Depósitos)

  • Alberto Franco Pozzolo

    (Università del Molise)

Abstract

Since the beginning of the financial crisis, multinational banks have been accused of being among the major causes of the financial system’s destabilization. But the available empirical evidence on the relationship between international diversification, value creation and riskiness of financial intermediaries does not provide a unique answer. In this paper we analyze such relationship on a sample of over 500 banks from 56 countries in the seven years before the beginning of the financial crisis. Our evidence shows a positive and statistically significant effect of international diversification on both value and riskiness

Suggested Citation

  • Mohamed Azzim Gulamhussen & Carlos Pinheiro & Alberto Franco Pozzolo, 2012. "Internationalization, diversification and risk in multinational banks," BANCARIA, Bancaria Editrice, vol. 11, pages 28-40, November.
    • Handle: RePEc:ban:bancar:v:11:y:2012:m:november:p:28-40
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    File URL: http://www.bancaria.it/en/internationalization-diversification-and-risk-in-multinational-banks/
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    Cited by:

    1. Khan, Abu & Hassan, M. Kabir & Maroney, Neal & Boujlil, Rhada & Ozkan, Bora, 2020. "Efficiency, diversification, and performance of US banks," International Review of Economics & Finance, Elsevier, vol. 67(C), pages 101-117.

    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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