Scholarlink

<p>Revenue diversification (RDIV) is a strategy that can help stabilize banks by expanding their income sources. However, it is also important to understand how such strategies behave during sudden economic shocks. What factors determine whether banks diversify? And how does RDIV affect different banking income activities under changing economic conditions? This study tries to analyze the impact of sudden shocks like COVID-19 on diversification strategy and its implications for different income sources. For this, the study used panel data from 21 Indian commercial banks from 2016 to 2024. It distinguishes between pre-COVID and post-COVID phases to understand how RDIV behaviour and outcomes change after the pandemic. First, the determinants of RDIV are analyzed using fixed-effects (FE) panel models, two-way fixed-effects (TWFE) estimations, and interaction-based models to examine whether diversification drivers are regime-dependent. Then, output-oriented Data Envelopment Analysis (DEA) under variable returns to scale is used to measure bank efficiency. Separate efficiency scores are estimated for interest-income efficiency and non-interest-income efficiency to capture channel-specific effects. The efficiency implications of RDIV are further examined through FE, TWFE, and System GMM estimations. The findings show that the determinants of RDIV are not stable across economic regimes. The COVID-19 shock brought a structural shift in revenue diversification decisions. Diversification also generates asymmetric efficiency effects in different banking activities. While RDIV improves non-interest income efficiency, it drags down the interest income efficiency. Overall, these findings suggest that revenue diversification is more of a mechanism for reallocation between income channels, rather than a strategy that uniformly increases efficiency across situations.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

Revenue Diversification as a Strategic Adjustment: Determinants, Regime Shifts, and Channel-Specific Efficiency Effects in Indian Banks

  • 期刊论文

  • 发表日期：

    2026年7月31日

查看全文
  • Md Nasim Ansari,
  • Monica Mahali,
  • Kishan Jee,
  • Jamaluddeen

摘要

Revenue diversification (RDIV) is a strategy that can help stabilize banks by expanding their income sources. However, it is also important to understand how such strategies behave during sudden economic shocks. What factors determine whether banks diversify? And how does RDIV affect different banking income activities under changing economic conditions? This study tries to analyze the impact of sudden shocks like COVID-19 on diversification strategy and its implications for different income sources. For this, the study used panel data from 21 Indian commercial banks from 2016 to 2024. It distinguishes between pre-COVID and post-COVID phases to understand how RDIV behaviour and outcomes change after the pandemic. First, the determinants of RDIV are analyzed using fixed-effects (FE) panel models, two-way fixed-effects (TWFE) estimations, and interaction-based models to examine whether diversification drivers are regime-dependent. Then, output-oriented Data Envelopment Analysis (DEA) under variable returns to scale is used to measure bank efficiency. Separate efficiency scores are estimated for interest-income efficiency and non-interest-income efficiency to capture channel-specific effects. The efficiency implications of RDIV are further examined through FE, TWFE, and System GMM estimations. The findings show that the determinants of RDIV are not stable across economic regimes. The COVID-19 shock brought a structural shift in revenue diversification decisions. Diversification also generates asymmetric efficiency effects in different banking activities. While RDIV improves non-interest income efficiency, it drags down the interest income efficiency. Overall, these findings suggest that revenue diversification is more of a mechanism for reallocation between income channels, rather than a strategy that uniformly increases efficiency across situations.