The determinants of capital structure in insurance companies Evidence from Saudi Arabia
Journal of Contemporary Issues in Business and Government,
2021, Volume 27, Issue 2, Pages 1303-1315
AbstractThe study examines the significant determinants of the insurance companies' capital structure
listed on the Saudi Stock Exchange (Tadawul) from 2010 to 2018. In this study, one dependent
variable capital structure is represented by leverage and six independent variables, firm
characteristics variables (profitability, growth rate, risk, size, age) and macroeconomic variable
(GDP). A random effect on a panel data regression model is employed as a tool of analysis. This
study attempts to fill the lack of research in Saudi insurance companies to arrive at constructive
suggestions that could contribute to financial structure decisions. The results show that
profitability, age and risk have a statistically significant negative effect on the capital structure.
Growth rate and firm size significantly positively influence the capital structure, while gross
domestic product is insignificant.
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