Income Diversification and Cost Efficiency Nexus: Empirical evidence from the Asia Pacific banking sector

Authors

  • Yosman Bustaman Faculty of Business and Communication, Swiss German University, Tangerang, Indonesia
  • Nurdayadi Faculty of Business and Communication, Swiss German University, Tangerang, Indonesia
  • Daffaa Dewa Al-Ghiffari Faculty Economic and Business, Universitas Indonesia, Depok, Indonesia

Keywords:

Income Diversification, Bank Efficiency, Earning Volatility, Asia Pacific

Abstract

This study investigates the relationship between income diversification and cost efficiency in the Asia Pacific banking industry, using a fixed effect panel data regression model from 2012 to 2022. The analysis focuses on the effects of different income sources on banking efficiency. Our main finding is that income diversification positively impacts bank efficiency, indicating that banks with diverse income streams tend to operate more efficiently. This result remains robust even when considering the potential effects of income volatility and various moderating variables. While diversification is generally beneficial, our findings suggest that not all diversification is equally advantageous.

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Published

2025-01-03

How to Cite

Bustaman, Y., Nurdayadi, & Al-Ghiffari, D. D. (2025). Income Diversification and Cost Efficiency Nexus: Empirical evidence from the Asia Pacific banking sector. Environment-Behaviour Proceedings Journal, 10(SI 25). Retrieved from https://ebpj.e-iph.co.uk/index.php/EBProceedings/article/view/6461

Issue

Vol. 10 No. SI 25 (2025): Jan. SIME'24Perth, Navigating Shared Futures in Social Innovation, Management, Economics, & Engineering 28-29 May 2024 (Draft)

Section

Financial Matters

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Copyright (c) 2025 Yosman Bustaman, Nurdayadi, Daffaa Dewa Al-Ghiffari

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.