What drives the capital structure? The case of non-life insurance companies in Serbia
This paper studies the factors behind the capital structure of insurance companies. We used financial reports of non-life and composite insurance companies in Serbia between 2006 and 2019. In particular, we apply a panel-data approach to examine the relationship between leverage, defined as the rati...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Economics institute, Belgrade
2021-01-01
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| Series: | Industrija |
| Subjects: | |
| Online Access: | https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2021/0350-03732101025B.pdf |
| Summary: | This paper studies the factors behind the capital structure of insurance companies. We used financial reports of non-life and composite insurance companies in Serbia between 2006 and 2019. In particular, we apply a panel-data approach to examine the relationship between leverage, defined as the ratio of technical reserves to capital and various firm-level characteristics. The coefficients estimated using the individual fixed-effects model indicate a significant and negative influence of profitability, growth and liquidity measures on leverage and a significant and positive influence of company size. The results indicate that the tradeoff theory and the pecking order theory are relevant in explaining the non-life insurer capital structure in Serbia. |
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| ISSN: | 0350-0373 2334-8526 |