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The Relationship and Causality Testing between Diversification, Risk and Financial Performance: Empirical Examiniation in Taiwan's Banking Industry

Lin, Shu-Ling (Sherry); Wu, Soushan; Penm, Jack HW; Terrell, Richard

Description

The objective of this study is to examine the portfolio theory that suggests that diversification can potentially reduce both the return variance and the probability of failure of a portfolio. The study aims to investigate the diversification measure by means of the Hershman-Herfindahl index proposed by Berry [1], and applies the 'diversification index' proposed by Demsetz and Strahan [2,3] by scaling systematic risk with stock return variance of individual banks. It is assumed that as banking...[Show more]

CollectionsANU Research Publications
Date published: 2005
Type: Journal article
URI: http://hdl.handle.net/1885/85621
Source: International Journal of Services Technology and Management
DOI: 10.1504/IJSTM.2005.007512

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