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 |
| _version_ | 1818355688129167360 |
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| author | Božović Miloš Koprivica Marija |
| author_facet | Božović Miloš Koprivica Marija |
| author_sort | Božović Miloš |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-12-13T19:45:17Z |
| format | Article |
| id | doaj.art-6279ee18c4b24bdb88712573cf8a6a3e |
| institution | Directory Open Access Journal |
| issn | 0350-0373 2334-8526 |
| language | English |
| last_indexed | 2024-12-13T19:45:17Z |
| publishDate | 2021-01-01 |
| publisher | Economics institute, Belgrade |
| record_format | Article |
| series | Industrija |
| spelling | doaj.art-6279ee18c4b24bdb88712573cf8a6a3e2022-12-21T23:33:35ZengEconomics institute, BelgradeIndustrija0350-03732334-85262021-01-01491254110.5937/industrija49-303690350-03732101025BWhat drives the capital structure? The case of non-life insurance companies in SerbiaBožović Miloš0Koprivica Marija1https://orcid.org/0000-0003-4239-2252University of Belgrade, Faculty of Economics, SerbiaUniversity of Belgrade, Faculty of Economics, SerbiaThis 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.https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2021/0350-03732101025B.pdfnon-life insurancecapital structureleveragetradeoff theorypecking order theory |
| spellingShingle | Božović Miloš Koprivica Marija What drives the capital structure? The case of non-life insurance companies in Serbia Industrija non-life insurance capital structure leverage tradeoff theory pecking order theory |
| title | What drives the capital structure? The case of non-life insurance companies in Serbia |
| title_full | What drives the capital structure? The case of non-life insurance companies in Serbia |
| title_fullStr | What drives the capital structure? The case of non-life insurance companies in Serbia |
| title_full_unstemmed | What drives the capital structure? The case of non-life insurance companies in Serbia |
| title_short | What drives the capital structure? The case of non-life insurance companies in Serbia |
| title_sort | what drives the capital structure the case of non life insurance companies in serbia |
| topic | non-life insurance capital structure leverage tradeoff theory pecking order theory |
| url | https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2021/0350-03732101025B.pdf |
| work_keys_str_mv | AT bozovicmilos whatdrivesthecapitalstructurethecaseofnonlifeinsurancecompaniesinserbia AT koprivicamarija whatdrivesthecapitalstructurethecaseofnonlifeinsurancecompaniesinserbia |