The relationship between geographical diversification (GDI) and profitability (ROA) has yielded mixed findings across various developed countries. This study re-examined the relationship using data of public firms listed on the main market of Bursa Malaysia for the period of 2010-2014 using quantile regression approach. The firms are categorised into small firms and large firms based on the firm size median value. The empirical results show that GDI affects ROA heterogeneously in various quantile levels of the ROA for all firms, small firms and large firms. GDI significantly (positive relationship) influences ROA in the middle quantile region (from quantile 0.25 to 0.75) for all firms, in the low quantile region (from quantile 0.1 to 0.5) for the sample of small firms and in the high quantile region (from quantile 0.5 to 0.9) for the sample of large firms. Therefore, GDI activities could benefit firms, provided that the activities are conducted wisely by taking into account the profitability levels of firms as well as the size of firms. This study contributes to literature on geographical diversification by providing empirical support in the context of an emerging market.
Recent studies reasoned that digitalising business processes support financial inclusion, resulting in greater economic activities and growth. Digital financial inclusion is argued to be accessible to some privileged and digitally savvy individuals. However, digitalised financial services do not always guarantee financial inclusion. This study examines how the digitalisation of business processes might instil financial inclusion in lower-middle-income ASEAN economies. Based on the Diffusion of Innovation (DOI) theory, the digitalisation of business processes is modelled by fixed high-speed broadband, mobile and cellular subscriptions as a predictor of financial inclusion. The pooled mean group estimation of the autoregressive distributed lag (ARDL) model is employed to determine the effect of digitalisation on the financial inclusion of Cambodia, Indonesia, Laos, Myanmar, the Philippines and Vietnam economies. The key finding is the significance of digitalisation in inducing the financial inclusion of lower-middle-income ASEAN economies. The digitalisation of business processes significantly affects the accessibility of private businesses to domestic credit provided by their banks.