چكيده به لاتين
The competition environment has got so complicated these days. Almost all businesses try to obtain competitive advantage so they can attract more customers. One of the commonly used strategies after Second World War is geographic diversification. Businesses use this strategy to reduce risks, increase customers and their income. However, diversification has never been without cost and some businesses have incurred many losses because of that; this has caused many studies to be done in many countries and many industries.
Banking is not an exception either. Indeed, Banking is a booming industry in Iran. Not to consider the ups and downs of economic situation, the numbers of financial institutions and banks has been growing over the last decades; There also reports issued by CIB claiming that demands for bank establishment is growing in a positive way. Besides all these facts, the rate of branch establishment is also increasing in Iran; some experts believe the number of banks in Iran is more than real capacity though.
The current research has considered the relationship between geographic diversification and banks performance in Panel Data method. The data about 29 Iranian banks between years of 2007 to 2015 has been analyzed. The findings confirm the diversification as a suitable strategy in Iranian banks with minimum number of branches; however, the negative effect of the number of branches on banks performance is observed.
Keywords:
Geographic Diversification, Panel Data, Herfindahl Index
