Impact of Diversification on Bank Stability: Evidence from Emerging and Developing Countries

Table 4

Regression results for the impact of diversification on bank stability and risk.

Variables	(1)	(2)	(3)	(4)	(5)	(6)
	Z score	σROA	σROE	Z score	σROA	σROE
L. Dependent	0.460	0.381	0.565	0.571	0.0829	0.438
	(0.0263)	(0.0238)	(0.0238)	(0.0393)	(0.0307)	(0.0293)
IDV	0.0567	−1.519	0.149
	(0.0263)	(0.382)	(0.440)
IDVSQ	−0.0669	3.300	1.809
	(0.0249)	(0.691)	(0.417)
HHI loan				0.165	1.344	0.219
				(0.0449)	(0.487)	(0.501)
HHI loan SQ				−0.00783	−1.005	−0.223
				(0.0209)	(0.315)	(0.248)
LIQ	−0.0154	−0.0684	−0.0888	−0.0160	−0.0753	−0.166
	(0.00522)	(0.0969)	(0.0542)	(0.00367)	(0.0759)	(0.105)
LEV	0.0103	0.232	0.0480	0.0243	−0.219	−0.128
	(0.00787)	(0.165)	(0.0882)	(0.00835)	(0.165)	(0.129)
CIR	−0.0262	−0.930	−1.559	−0.0277	−2.105	−1.466
	(0.0113)	(0.176)	(0.272)	(0.00887)	(0.220)	(0.227)
NIM	−0.0921	3.629	3.324	−0.0331	2.117	1.999
	(0.0251)	(0.635)	(0.723)	(0.0200)	(0.368)	(0.690)
INF	0.00987	0.116	−0.0930	0.0105	2.912	1.405
	(0.0103)	(0.182)	(0.165)	(0.0153)	(0.203)	(0.288)
GDP	−0.0474	1.129	0.232	0.0244	0.505	0.250
	(0.00716)	(0.354)	(0.0962)	(0.0122)	(0.436)	(0.215)
CRD	−1.089	−39.33	66.66	−0.116	15.80	10.03
	(0.702)	(11.61)	(20.50)	(0.0460)	(1.996)	(4.308)
IDVCRD	5.630	219.3	−324.7
	(3.511)	(57.05)	(99.68)
IDVSQCRD	−7.065	−295.0	377.9
	(4.146)	(66.53)	(116.6)
CLCG	0.00105	0.000981	0.00873	0.000468	0.00441	−0.00108
	(0.000307)	(0.00542)	(0.00451)	(0.000163)	(0.00286)	(0.00275)
IDVCLCG	−0.00226	0.00307	−0.0105
	(0.000807)	(0.0128)	(0.0114)
HHI loanCRD				0.409	−142.2	−64.91
				(0.254)	(18.62)	(29.46)
HHI loanCLCG				−0.00168	−0.00727	0.00361
				(0.000469)	(0.00955)	(0.00984)
HHI loan SQCRD					194.3	67.50
					(24.94)	(36.84)
Observations	702	702	702	519	519	519
AR (1) (valued)	0.013	0.000	0.005	0.001	0.012	0.000
AR (2) (valued)	0.528	0.56	0.729	0.374	0.443	0.742
Hansenvalue	0.150	0.58	0.127	0.509	0.219	0.153
Number of id	45	45	45	45	45	45

Source: author estimates (2022). Note: The terms , , and indicate significance at the 10%, 5%, and 1% levels, respectively.