Internationalization, diversification and risk in multinational banks
Gulamhussen, Azzim Pinheiro, Carlos Pozzolo, Alberto Franco
Gulamhussen, Azzim
Pinheiro, Carlos
Pozzolo, Alberto Franco
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Publication Type
Journal article
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Supervisor
Publication Year
2012
Journal
Bancaria
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Publication Issue
11
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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.
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Keywords
Accounting & Finance, Financial Services Management, Financial Services & Insurance, Financial Services Management