The Trilogy of Ownership, Income Diversification, and Performance Nexus: Empirical Evidence from Tunisian Banks

Nour Alouane, Ines Kahloul, Jocelyn Grira

    Research output: Contribution to journalJournal Articlepeer-review

    10 Citations (Scopus)

    Abstract

    This paper investigates the effects of income diversification on bank performance and how ownership structure affects this relationship. Using data on listed Tunisian banks during the 2008–2017 period, we find evidence that increased diversification improves bank performance, but the benefits of diversification are offset by the increased exposure to volatile noninterest income. We also observe that banks with concentrated ownership moderate the impact of diversification on performance in Tunisian banks. In addition, we highlight that diversified banks with ownership concentration diminish risk, suggesting that ownership concentration plays an important moderating role. Our results have important implications on bank managers and regulators in Tunisia as well as in similar emerging economies.

    Original languageEnglish
    Article number102180
    JournalFinance Research Letters
    Volume45
    DOIs
    Publication statusPublished - Mar. 2022

    Keywords

    • Bank performance
    • Income diversification
    • Ownership structure
    • Risk
    • Stability

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