Target Capital Structure of Insurance Companies

2016 ◽  
Vol 5 (3) ◽  
pp. 47-53
Author(s):  
Полякова ◽  
M. Polyakova ◽  
Поляков ◽  
K. Polyakov
Keyword(s):  
Capital Structure ◽  
Insurance Market ◽  
Insurance Companies ◽  
Insurance Markets ◽  
Empirical Testing ◽  
Pecking Order ◽  
Return On Assets ◽  
Trade Off ◽  
The Impact ◽  
The Capital Structure

This article is devoted to the analysis of the existence of target capital structure of insurance companies and empirical testing of wide known capital structure theories for Russian insurance companies. Trade-off and “pecking order” theories were considered and the model that reflects the impact on the capital structure indicators various characteristics of firms was built. Traditional for insurance markets coefficients — net premium/capital ratio and liabilities/active ratio — were considered as capital structure indicators. It was shown that tradeoff theory is more adequate for Russian insurance market. The existence of target capital structure was discovered. Such indicators as firm size, the share of premiums transferred to reinsurance, return on assets, returned on capital have significant impact on the capital structure. The opportunity to grow, which was estimated as growth in premiums, and the breadth of the range didn’t has significant impact.

The effects of the global financial crisis on the capital structure of EPRA/NAREIT Europe index companies

2015 ◽  
Vol 8 (1) ◽  
pp. 3-23 ◽  
Author(s):  
Giacomo Morri ◽  
Andrea Artegiani
Keyword(s):  
Financial Crisis ◽  
Real Estate ◽  
Capital Structure ◽  
Global Financial Crisis ◽  
Pecking Order ◽  
Trade Off ◽  
Content Type ◽  
The Global Financial Crisis ◽  
The Impact ◽  
The Capital Structure

Purpose – The purpose of this paper is to test whether the financial crisis has affected the capital structure of real estate companies in Europe and whether these impacts can be studied utilizing the variables traditionally used by the trade-off and pecking-order theories to explain the capital structure of companies. Design/methodology/approach – The study uses a fixed-effect panel regression analysis and a sample composed of companies included in the EPRA/NAREIT Europe Index. The effect of the financial crisis has been accounted for within the model by means of a dummy variable. Findings – The global financial crisis did have an impact on the capital structure of companies and the main variables traditionally used by the trade-off and pecking order theories proved to be suitable in explaining the capital structure of real estate companies. Real estate investment trusts are, on average, more leveraged than traditional real estate companies due to their special regulatory status. Research limitations/implications – The study is limited to the European market and UK companies in particular account for a large part of the sample. In addition, major regulatory differences between the various European countries are not taken into account in the model. Originality/value – Similar studies have been performed for the US and Australian market. However, the impact of the global financial crisis has not been traditionally considered in these studies.

A Study of Determinants of Capital Structure through Panel Data Analysis of Firms Listed in NSE CNX 500

2016 ◽  
Vol 20 (4) ◽  
pp. 267-277 ◽  
Author(s):  
Barnali Chaklader ◽  
Deepak Chawla
Keyword(s):  
Capital Structure ◽  
Control Variable ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Tax Shield ◽  
Debt Tax Shield ◽  
The Impact ◽  
The Capital Structure

This study contributes to the capital structure literature by investigating the determinants of capital structure of firms listed in NSE CNX 500. The period of the study is 2008–2015, the period starting from the year of global slowdown. This study is an attempt to study the capital structure of firms listed in National Stock Exchange in the post liberalization period. The objectives of the study are to study the impact of independent variables such as growth, profitability, tangibility, liquidity, size and non-debt tax shield on financial leverage and also to find out whether the results are in line with the pecking order theory or the trade-off theory of capital structure. Size is taken as a control variable. Our study supports the trade-off theory for all variables such as growth, profitability, size tangibility and non-debt tax shield. Liquidity is the only independent variable that goes in accordance with the pecking order theory. Thus, this study is more inclined towards the trade-off theory.

scholarly journals Company’s Characteristics and Capital Structure “An Empirical Study on Listed Insurance Companies in Jordan”

2016 ◽  
Vol 8 (2) ◽  
pp. 103
Author(s):  
Omar Al Singlawi ◽  
Mohammad Aladwan
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Financial Statements ◽  
Insurance Companies ◽  
Panel Regression ◽  
Pecking Order ◽  
Trade Off ◽  
Significant Negative Relationship ◽  
Single Regression ◽  
The Capital Structure

<p>This study examined the company’s characteristics that affect the capital structure of insurance companies in Jordan. The study has employed panel regression model in investigating the capital structure of insurance companies using financial statements data of 23 companies covering the period 2010-2014. The results showed that both the static trade-off and pecking order theories are important in explaining the capital structure of insurance companies in Jordan. Company’s characteristics: size, profitability, tangibility, growth and risk were statistically significant to capital structure. Based on multiple and single regression the results of the study showed a statistical significant relationship between characteristics of insurance companies and their capital structure. The results also revealed a significant negative relationship between capital structure and company’s size, profitability, growth and risk while tangibility was significantly positively correlated to capital structure.</p>

scholarly journals DETERMINATIVE FACTORS OF THE CAPITAL STRUCTURE IN THE INTEGRATED COMPANY OF OIL

2013 ◽  
Vol 5 (1) ◽  
Author(s):  
Julio Henrique Machado ◽  
Carlos Roberto de Godoy
Keyword(s):  
New York ◽  
Capital Structure ◽  
Stock Exchange ◽  
New York Stock Exchange ◽  
Pecking Order ◽  
Trade Off ◽  
York Stock Exchange ◽  
The Capital Structure

As decisões de financiamento têm sido amplamente discutidas em debates acadêmicos sobre finanças corporativas. Como o setor petrolífero é crucial ao desenvolvimento econômico mundial, por representar a principal fonte primária de energia, percebe-se a necessidade de pesquisa sobre este grupo de decisões direcionadas ao setor em questão. Neste contexto, o objetivo do trabalho foi estudar os fatores indutores nas decisões de estrutura de capital nas companhias integradas do setor petrolífero mundial. Foram pesquisadas 18 empresas listadas na New York Stock Exchange (NYSE), considerando o período de 2005 a 2010. As variáveis estudadas foram liquidez, rentabilidade, tangibilidade, risco, tamanho, crescimento, exaustão e reposição de reservas (independentes) e dívida de curto prazo, longo prazo e total (dependente). Para a análise do comportamento das variáveis, efetuou-se o teste de regressão. Verificou-se que os principais atributos que influenciaram as decisões de financiamento no setor foram: liquidez, rentabilidade, risco e tamanho. Ademais, observou-se também que as variáveis específicas do setor, exaustão e reposição, apresentaram forte influência na estrutura de capital. Foram demonstradas evidencias de que tanto a teoria pecking-order quanto a trade-off explicam as decisões de financiamento no setor.

scholarly journals Capital structure determinants of hospitality sector SMEs

2016 ◽  
Vol 23 (1) ◽  
pp. 113-132 ◽  
Author(s):  
Luís Pacheco ◽  
Fernando Tavares
Keyword(s):  
Capital Structure ◽  
Small And Medium Enterprises ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Factors Affecting ◽  
Portuguese Economy ◽  
Hospitality Sector ◽  
The Capital Structure

The main objective of this article is to study the capital structure determinants of small and medium enterprises (SMEs) in the hospitality sector and how this can influence their level of indebtedness. Using panel data methodology and considering a sample of 43 Portuguese hotels, the authors study the capital structure determinants between 2004 and 2013. The study examines the indebtedness level in light of the two main theories – the Trade-off theory and the Pecking Order theory. The hospitality sector was chosen because of its importance in the Portuguese economy and because this particular sector has hardly been studied. In addition to total indebtedness, the authors extend the literature by analysing the differences between short-term and long-term indebtedness. The results obtained suggest that profitability, assets tangibility, firm dimension, total liquidity and risk are key factors affecting the capital structure of hospitality sector SMEs, while growth, other tax benefits and age were not deemed relevant. These results allow us to conclude that Trade-off and Pecking Order theories should not be considered in isolation to explain the capital structure of hospitality sector SMEs.

scholarly journals Analisis Dampak Struktur Modal Terhadap Profitabilitas

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Dwi Setiarini ◽  
Sujiono Sujiono ◽  
Hadi Sumarsono
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Secondary Data ◽  
T Test ◽  
Return On Assets ◽  
Credit Cooperatives ◽  
Equity Ratio ◽  
Data Source ◽  
The Impact ◽  
The Capital Structure

Funding is an important issue that is taken into account by the company, both for the establishment and expansion of the business. Capital structure has an impact on profitability, with the improvement in capital structure, the company gives profits. The purpose of this study was to determine the impact of the capital structure measured by Debt to Equity Ratio (DER) on profitability as measured by Return on Assets (ROA) partially in Sharia Savings and Credit Cooperatives Cooperatives or KSK Komment Year 2016 - 2019. This researcher uses regression analysis simple linear and t test. The data source used in this study is secondary data. The results of the study concluded that the capital structure measured by Debt to Equity Ratio (DER) partially had a negative impact on Return on Assets (ROA). While the t test on the variable Debt to Equity Ratio (DER) partially proved to have no significant impact on Return on Assets (ROA).

scholarly journals The Impact of Capital Structure on the Financial Performance of the Jordanian Industrial Companies Listed on the Amman Stock Exchange for the Period 2012-2015

2018 ◽  
Vol 9 (2) ◽  
pp. 369
Author(s):  
Shireen Mahmoud AlAli
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Return On Assets ◽  
Return On Equity ◽  
Industrial Companies ◽  
Earnings Per Share ◽  
Amman Stock Exchange ◽  
The Impact ◽  
The Capital Structure

The purpose of this study was to identify the effect of the capital structure as a percentage of total liabilities to total assets on the financial performance of the Jordanian industrial companies listed on the Amman Stock Exchange for the period 2012-2015.The study population included all the Jordanian general industrial companies listed on the Amman Stock Exchange. The sample of the study included 10 industrial companies listed on the Amman Stock Exchange. The linear regression analysis was used to test the relationship between variables using the ordinary least squares method (OLS).The results showed that there is a positive significant impact on the capital structure of the industrial shareholding companies listed in the Amman Stock Exchange as measured by the ratio of equity to total assets, return on equity and return on assets and net earnings per share as an indicator of financial performance.The results also showed a negative significant impact on the capital structure of industrial shareholding companies listed on the Amman Stock Exchange as measured by total liabilities to total assets, return on equity and return on assets as an indicator of financial performance, and net earnings per share as an indicator of the financial performance indicators.

Market structure, efficiency and profitability of insurance companies in Ghana

2015 ◽  
Vol 10 (4) ◽  
pp. 648-669 ◽  
Author(s):  
Abdul Latif Alhassan ◽  
George Kojo Addisson ◽  
Michael E. Asamoah
Keyword(s):  
Market Structure ◽  
Life Insurance ◽  
Insurance Industry ◽  
Consumer Welfare ◽  
Insurance Market ◽  
Insurance Companies ◽  
Insurance Markets ◽  
Ample Evidence ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of the regulatory-driven market structure on firm pricing behaviour by testing the structure-conduct-performance (S-C-P) hypothesis for both life and non-life insurance markets in Ghana. Design/methodology/approach – Using a panel data on 14 life and 22 non-life insurers from 2007 to 2011, the authors employed the Herfindahl Hirschman Index and concentration ratio as proxies for the S-C-P hypothesis while efficiency scores were estimated using the data envelopment analysis technique to proxy for the efficient structure (ES) hypothesis. The dependent variable, profitability was measured as return on assets while controlling for size, underwriting risk, leverage, GDP growth rate and inflation. The models were estimated using the panel corrected standard errors of Beck and Katz (1995) and random effects estimations. Findings – The results from the empirical estimation provide ample evidence in support for ES hypothesis for both life and non-life insurance markets. While conflicting results was found for SCP hypothesis in the non-life insurance market, it was rejected in the life insurance market. The findings also point to an increasing level of competition in both life and non-life insurance industry in Ghana though they still remain concentrated with the life insurance sector having high levels of efficiency compared to the non-life sector. Practical implications – The findings of the study will enhance the understanding of firm behaviour in the new markets created to shape regulatory and competition policies of the regulator to promote consumer welfare while ensuring a stable industry to enhance its role in economic development. Originality/value – This is the first study to test the market power and efficient hypotheses on the insurance industry in Ghana. To the best of the author’s knowledge, this study is the first to examine the determinants of profitability in the non-life insurance market.

scholarly journals Trade-Off Theory and Pecking Order Theory: Evidence from Real Estate Companies in Vietnam

2021 ◽  
Author(s):  
Hoang Duc Le ◽  
Nguyen Quang Viet ◽  
Nguyen Huaong Anh
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Relevant Theory ◽  
The Capital Structure

This study was implemented with the goal of testing the validity of trade-off theory and pecking order theory in determining the capital structure in 50 listed real estate companies in Vietnam. The result of this study shows that the pecking order theory is the more approriate and should be applied for the listed real estate companies in Vietnam, and be the informative document for those firms to take into account the relevant theory to adjust their own capital structure, so that they can raise their own competitiveness and continue the development of the business

scholarly journals DETERMINANTS OF CAPITAL STRUCTURE: AN EMPIRICAL EVALUATION OF OMAN’S TOURISM COMPANIES

2020 ◽  
Vol 7 (1) ◽  
pp. 01-10
Author(s):  
Syeeda Shafiya Mohammadi ◽  
Tamanna Dalwai ◽  
Dure Najaf ◽  
Ashwaq Saif Al-Yaarubi
Keyword(s):  
Capital Structure ◽  
Empirical Evaluation ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Corporate Managers ◽  
Prior Literature ◽  
Using Data ◽  
The Capital Structure

Purpose: The purpose of this research is to investigate the determinants of the capital structure of tourism companies in Oman. This study uses the trade-off theory and pecking order theory to postulate hypotheses related to determinants of capital structure. Methodology: In line with extant literature, size, liquidity, tangibility, growth opportunities, and risk are used as the determinants of the capital structure. The sample in this study includes nine listed tourism companies for the period 2007 to 2016, which aggregates to 90 firm-year observations. Main findings: The results show that the capital structure of tourism companies is influenced by size, growth, and risk. The trade-off theory and pecking order theory are useful for partially explaining the leverage decisions of Oman's tourism companies. Implications: The empirical findings of this research imply that tourism companies' corporate managers can make optimal capital structure decisions based on determinants. Novelty: To the best of the author's knowledge, this study is a first for examining the determinants of capital structure for Oman's tourism companies using data over ten years. It lends support to the determinants identified in prior literature for developed and developing countries.

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