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http://dx.doi.org/10.13106/jafeb.2020.vol7.no11.647

Effect of Ownership Structure on Bank Diversification and Risk-Taking Behavior in Bangladesh  

MOUDUD-UL-HUQ, Syed (Department of Accounting, Mawlana Bhashani Science and Technology University)
BISWAS, Tanmay (Department of Accounting, Mawlana Bhashani Science and Technology University)
CHAKRABORTY, Brishti (Department of Accounting, Mawlana Bhashani Science and Technology University)
AMIN, Md. Al (Department of Accounting, Mawlana Bhashani Science and Technology University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.11, 2020 , pp. 647-656 More about this Journal
Abstract
This study empirically examines the effect of ownership structure on bank diversification and risk-taking behavior. The population of this study is based on all commercial banks listed in Bangladesh. Thirty-two conventional commercial banks were randomly selected from thirty-three conventional banks for this study. Data was collected from the annual reports of the concerned banks from 2000 to 2017. To analyze the data, we had applied the two-stage least squares (2SLS) estimator. The results of the analysis show that ownership structure i.e. managerial ownership, institutional ownership, general public ownership, and ownership concentration have a significant negative impact on bank diversification. On the other hand, institutional ownership, managerial ownership, and general public ownership have a significant positive impact on Z-score, and ownership concentration has an insignificant but positive impact on the Z-score of banks in Bangladesh. Therefore, the study opposes the benefits of diversification and promotes ownership structure which is capable of ensuring better financial stability by reducing the probability of risk. The policy-makers especially, Bangladesh banks should evaluate the fact of this study to issue guidelines on corporate governance, bank diversification, and risk-taking behavior of commercial banks.
Keywords
Ownership Structure; Diversification; Bank Risk; Ownership Concentration; Two-stage Least Squares;
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Times Cited By KSCI : 6  (Citation Analysis)
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