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How does the stock market value bank diversification? Evidence from Vietnam

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  • Vo, Xuan Vinh

Abstract

Even though commercial banks have gradually followed the diversification strategy and deeply penetrated into non-traditional businesses for further income sources, studies on potential diversification benefits provide mixed results. This paper investigates how stock market values bank diversification using a data set of Vietnamese listed banks for the period 2006–2014. Overall, we find a negative relationship between bank diversification and stock market valuation. This implies investor preference for banks focusing on traditional activities.

Suggested Citation

  • Vo, Xuan Vinh, 2017. "How does the stock market value bank diversification? Evidence from Vietnam," Finance Research Letters, Elsevier, vol. 22(C), pages 101-104.
  • Handle: RePEc:eee:finlet:v:22:y:2017:i:c:p:101-104
    DOI: 10.1016/j.frl.2017.06.005
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    References listed on IDEAS

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    Cited by:

    1. Vo, Xuan Vinh, 2018. "Bank lending behavior in emerging markets," Finance Research Letters, Elsevier, vol. 27(C), pages 129-134.
    2. Xuan Vinh Vo, 2020. "The Role of Bank Funding Diversity: Evidence from Vietnam," International Review of Finance, International Review of Finance Ltd., vol. 20(2), pages 529-536, June.
    3. Le Ha Thi Thu, 2020. "The Impact of Auditor Specialization and Banks’ Listing Status on Earnings Management in Vietnamese Commercial Banks," Asian Journal of Law and Economics, De Gruyter, vol. 11(1), pages 1-16, April.
    4. Thi Lam Anh Nguyen & Xuan Vinh Vo, 2020. "Does corporate governance really matter for bank efficiency? Evidence from ASEAN countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 681-706, December.
    5. Jacob Cherian & Muhammad Safdar Sial & Dang Khoa Tran & Jinsoo Hwang & Thai Hong Thuy Khanh & Mansoor Ahmed, 2020. "The Strength of CEOs’Influence on CSR in Chinese listed Companies. New Insights from an Agency Theory Perspective," Sustainability, MDPI, Open Access Journal, vol. 12(6), pages 1-13, March.

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    More about this item

    Keywords

    Bank diversification; Valuation; Vietnam;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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