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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.

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  • 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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    3. Velasco, Pilar, 2022. "Is bank diversification a linking channel between regulatory capital and bank value?," The British Accounting Review, Elsevier, vol. 54(4).
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    6. Vo, Xuan Vinh, 2018. "Bank lending behavior in emerging markets," Finance Research Letters, Elsevier, vol. 27(C), pages 129-134.
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    8. 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.
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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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