Determinant of Income Diversification: Evidence from Commercial Banks in Ethiopia
| dc.contributor.advisor | Degefe, Duressa (PhD) | |
| dc.contributor.author | Negasew, Worku | |
| dc.date.accessioned | 2019-03-10T12:05:59Z | |
| dc.date.accessioned | 2023-11-04T07:57:23Z | |
| dc.date.available | 2019-03-10T12:05:59Z | |
| dc.date.available | 2023-11-04T07:57:23Z | |
| dc.date.issued | 2019-02 | |
| dc.description | A Thesis Submitted to the School of Graduate studies of Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Master of Science in Accounting and Finance. | en_US |
| dc.description.abstract | This thesis presents an analysis of the determinants Ethiopian commercial banks non-interest income diversification decisions. The objective of this study was to investigate the effect of both bank specific and macro-economic factors on non-interest income diversification. This aimed to identify the most relevant bank specific and macro-economic factors that affect commercial banks income diversification in Ethiopia. For this purpose, a panel dataset comprising eleven Ethiopian commercial banks from 2002/03 to 2016/17 were selected and analyzed. The study used fixed effect regression technique, correlation analysis and descriptive statistics to analyze the data using STATA statistical software. The dependent variable used to measure non-interest income diversification was Non-interest income ratio. The researcher used bank size, net-interest margin, lending leverage, insolvency risk, capital adequacy and efficiency as bank specific independent variables. The researcher also used real GDP growth rate and inflation rate as macro-economic independent variables. From the result of this thesis, the researcher finds that banks income diversification decision reflects a variety of managerial abilities to manage: insolvency risk, net-interest margin, capital adequacy, lending leverage and efficiency. The empirical result of this study shows that insolvency risk has a positive and significant effect on non-interest income diversification of commercial banks in Ethiopia from 2002/03 to 2016/17. Meanwhile, capital adequacy, lending leverage, net-interest margin and efficiency have a significant negative impact on non-interest income diversification decision. Moreover, bank size, inflation rate and real GDP growth rate have insignificant positive effect on non-interest income diversification of commercial banks in Ethiopia. Furthermore, net-interest margin, insolvency risk, capital adequacy, lending leverage and efficiency were the major factors that affect income diversification decision of commercial banks in Ethiopia and management and regulators of Ethiopian commercial banks need to consider these factors while setting rules and procedures on income diversification decision. | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/16665 | |
| dc.language.iso | en_US | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | Commercial banks | en_US |
| dc.subject | Ethiopia | en_US |
| dc.subject | Income diversification | en_US |
| dc.subject | Non-interest income | en_US |
| dc.title | Determinant of Income Diversification: Evidence from Commercial Banks in Ethiopia | en_US |
| dc.type | Thesis | en_US |