We study empirically the effect of focus (specialization) vs. diversification on the return and the risk of banks using data from 105 Italian banks over the period 1993–1999. Specifically, we analyze the tradeoffs between (loan portfolio) focus and diversification using data that is able to identify loan exposures to different industries, and to different sectors, on a bank-by-bank basis. Our r...

Individuals relying on natural resource extraction for their livelihood face high income variability driven by a mix of environmental, biological, management, and economic factors. Key to managing these industries is identifying how regulatory actions and individual behavior affect income variability, financial risk, and, by extension, the economic stability and the sustainable use of natural r...

I present a framework of banking in which banks’ main role is to monitor their borrowers. Within this framework I analyze the benefits of diversification and the threats of systemic risk and inter-bank competition. Diversification improves banks’ monitoring incentives. High systemic risk not only hampers banks’ monitoring incentives, but also makes diversification less effective. I also show th...

eremurus and forage are main by-products in the khazangah rangelands of makoo region. eremurus is harvested and used by local people in a period of 30 days during the spring in this region. at this study, eremurus and forage have been evaluated financially and the data were obtained through field work using unstructured interviews as well as direct observation. the harvested eremurus value was ...

Through their transformation of assets, banks carry a considerably degree of non-diversifiable economic risks on their books, and given that banks are extremely sensitive to deadweight costs of financial distress, we ask whether international extensions of credit may improve the diversification of such risks. Using an unpublished data set on the cross-border claims of banks located in four coun...

Climate models and satellite observations both indicate that the total amount of water in the atmosphere will increase at a rate of 7% per kelvin of surface warming. However, the climate models predict that global precipitation will increase at a much slower rate of 1 to 3% per kelvin. A recent analysis of satellite observations does not support this prediction of a muted response of precipitat...